Being a First Time Home Buyer Doesn’t Have To Be Hard With These 9 Tips

Purchasing your very first home is an exciting time in your life and should be fun! When house hunting, ensure you can afford what you’re looking at. With low interest rates, now is the perfect time for homebuyers to take advantage of those rates. If you are buying a home for the first time, it is important to find a realtor and lender who will explain the home buying process to you so you know what to expect. Relying on their expertise accompanied with these nine tips to succeed in your home buying journey.   

1. Start Building Your Credit Score

A number of people tend to hurt their credit by making less than intelligent purchases when they are younger. Once you have learned to live within your means, you can start saving for a home. In order to receive a mortgage with a reasonable interest rate, your credit score will have to be healthy. Building and repairing your score months before you start searching for a home is imperative. You do not want to find the home of your dreams only to lose out on it due to being rejected for a mortgage on account of poor credit. Getting a thorough check of your credit score can allow for corrections or for you to pay the money that you owe. Receiving calls from bill collectors are rarely legitimate so owing money you don’t realize could occur. Getting credit repair professionals to help you can get your score up enough so you qualify for a first-time homebuyer mortgage. Buyer programs help encourage those that want to purchase their first home by allowing them to put a relatively small downpayment on a home. Real estate agents will understand the various types of home loans that you might qualify for. Military service can impact this as well as a VA loan can be quite advantageous. VA loans are a huge perk of serving in the military for a particular period of time along with college education being covered. The various buyer programs could differ depending on a number of variables. Bring your credit score up to around 700 to get the best interest rates possible as these don’t fluctuate too much after that. The fact that interest rates are relatively low makes this one of the best times in the last few decades to purchase a home. The only drawback is prices seem to be fluctuating which can scare buyers that are worried about another housing bubble. The Fed is looking to make interest rates a little higher than they are currently so start home shopping now.  

2. Pay Your Existing Debts

Running up a large balance on credit cards can be easy for some that do not view the piece of plastic as actual money. This usually occurs when people are younger and paying off debts can take years. You might find that when you pay all of your debts that your credit improves and the amount of money you qualify for increases. Setting up a plan to pay your existing debts needs to be done as they will not miraculously pay themselves if paying the minimum monthly. Freelancing can be a great way to drive down your debts by earning supplemental income in your spare time. Even a few hours per week adds up over the course of a few months.  

3. Pick An Experienced Real Estate Agent In The Area

Picking the right real estate agent is going to be of paramount importance. Getting to listings quickly and viewing them is important in hot housing markets. Having an offer accepted for a home will just depend on the inspection after finalizing the mortgage. There are some agents that partner with certain lenders they have worked with for years. The process becomes smooth when there are people that have worked together before. Technology has made it as convenient as ever to digitally sign documents and expedite the buying experience. Getting inside tips on homes before they are listed is something that only an experienced and well-known realtor can do for you. Real estate agents that work together frequently give each other tips or ask if the realtor might have any buyers in mind. Things you should look for in an experienced real estate professional:
  • Communication is key throughout the entire process and agents can call, text, or email depending on preference. People with traditional jobs can just step out to take a call each time their realtor calls.
  • A history of happy clients that can easily be seen in testimonials. These can be hosted on a platform or on the agent’s personal website or webpage for their real estate agent.
  • Knowledge of the local area should come at a premium especially if moving to a new city. The agent could be the best source of information that you have during your first few weeks in a new location. Details like how the sports teams of a local high school are can be something an agent might have knowledge of.
  • Experience with helping clients buy and sell different types of properties. Some might specialize in luxury homes while others stay in the waterfront home niche. The right real estate agent can actually make the buying process pleasant even though it is stressful. You want an agent that you know has your best interests in mind and is willing to negotiate intensely for you.

4. Don’t Change Jobs Before Your Job Search

Staying in the same job might not be what you want to do before your job search but it is important. You need to show that you are employed and lenders want to see you are with a job for a few years. Changing jobs can lead to a number of issues with the lender. Stick with your job for this period and start looking for others. After your closing, you can find another job that you enjoy more or that pays you a larger amount annually.  

5. Set A Real Budget

The issue arises when a lender lets a buyer know how much more they could receive even if it is well over what they want to spend. People don’t realize that these top numbers could leave other areas of their life empty due to a lack of money. Stable employment can be unexpectedly threatened so plan for the worst and hope for the best. Mortgage lenders have become more strict in terms of their loans. The housing bubble occurred due to lenders giving out loans that had a huge chance of defaulting. The proof of income and other financial information is now scrutinized heavily. Asking yourself the following questions can allow you to figure out which home you should buy:
  • What features do I want versus need? There are some features that would be nice to have but can be a financial drain like that of a large pool in the backyard.
  • What is the housing market looking like in the local area? You want to purchase a home that is a great investment in an up-and-coming area.
  • Do you want a fixed-upper or turnkey property? Some homeowners are willing to do some work while others want a smooth transition in terms of moving into their new home immediately.
  • Are there entertainment options in the local area? With so many people working remotely, entertainment options in the local area are as important as ever before.
  • What are the monthly costs associated with the property? Asking the previous owners about electricity or water bills is important. You do not want to be just squeaking by due to expenses being far more than anticipated.
  Don’t forget to be realistic during the process of purchasing a home. Some people get caught in the trap of buying a dream home then have trouble affording it. You want to be able to comfortably afford your home without living paycheck to paycheck.  

6. Self-Employed Individuals Have More Hoops To Jump Through

More people than ever before are self-employed and work from home. Usually, this is convenient unless it is time to purchase a home. There is a chance that your clients that you work with daily might have to write a letter confirming the length of the business relationship and the money that is exchanged. The tough aspect about being self-employed is you might have good years and those where you don’t earn as much. A lender is looking for consistency in income over the last couple of years. You might need to start pulling various files that have itemized payments. Mortgage lenders want to make sure you didn’t receive a personal loan in order to make payments. This could make you more apt to default on the loan which is not something lenders want to happen. Most loans get sold to other mortgage companies so making sure the default rate is low is essential.  

7. Find The Best Home Inspection Professionals Possible

Putting an offer on a home is one of the first steps after viewing. Once this offer is accepted, it is time for the daunting home inspection which could make or break the deal. The last thing you want is a huge problem to arise during your first few months owning the home. The home inspection is going to cost a few hundred dollars regardless so make sure you pick a top professional. The best part of an inspector is that they work for you rather than your agent or the seller’s agent. The roof and HVAC system are both very important as these can be huge costs if they need to be replaced. A damaged roof can lead to water damage, rot, and black mold which needs to be removed by a professional to be done safely.  

8. Figure Out Whether Your Current Furniture/Appliances Work With The Home

Added expenses are going to be important to note throughout the buying process. If the home comes fully furnished with appliances, then you have nothing to worry about. Appliances might need to be made of something specific or be a certain color. Furniture that you have in your current home might not be the best option for your new home. Spending thousands of dollars on furniture simply is not in the cards for people that put most of their cash into the downpayment of the home.  

9. Open Houses Are Important

Going to open houses is going to be important during your home search. The best aspect of this is that it can give you an idea of what a home is worth in a certain area. The other benefit is that you can see other listings that might be underpriced for a comparable home. Expanding your knowledge is what the open house is all about. There are even some couples that do this regularly as they want to know about the housing market when they decide to buy. You might not be looking for a home but see one that checks all of the boxes which might make it important to jump on quickly. Buying a home does not have to be a nightmare although it is going to bring you some stress. Informing yourself is the best way to reduce your stress as the right agent and self-education can work wonders. Use the tips above to make sure that this process goes smoothly. You’d be surprised as to how little of a hassle you are given if you do an incredible job paying off debt and improving your credit score

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Spire Financial (A Division of V.I.P. Mortgage, Inc.) brings lending expertise to you. All of our loan officers offer personalized communication for every client, guiding them through the process. We can show you ways to maximize your finances and unlock future opportunities. Spire Financial keeps you in control of refinancing, debt consolidation, and home equity. Together, we can achieve your financial goals.



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