Buying your first home can be both exciting and nerve-racking, depending on the amount of preparation done before delving into the real estate market. First time buyers who have taken the proper steps before looking for a new home will find the experience to be much more enjoyable than those who haven’t. Here are some items that will go a long way in aiding you in your search for your first home.
Your Credit Report Matters
Your credit report is the single most important factor taken into consideration when applying for a mortgage. While having a credit score between 600-699 in considered good credit, you can still expect to be offered interest rates that are .5% higher than the lowest possible. Ideally, you want your credit report to show a score in the range of 760-800 so you can receive the best rates available. Even a credit score between 700-760 could end up getting you an interest rate that is .25% higher than the lowest available.
Get a Mortgage Pre-Approval
Initially, your credit score will usually drop slightly when you take out a mortgage. Getting a mortgage pre-approval will help you assess where you stand financially and what you can expect your credit report to look like once you purchase your home.
Adding to Savings
Adding to your savings is a must-do before undertaking the purchase of your first home. Considering the down payment on a mortgage can be anywhere from 0%- 20% of the home value plus the upfront costs of home inspection and appraisal. You want to make sure that you’re not financially strained when the time comes. It’s a good idea to set aside a little more in case the price of your dream home lands on the higher end of your budget, or if you find a great house that you would like to make your own with a few renovations.
Choosing the Right Real Estate Agent
You should seek out a real estate agent with a proven track record in the specific neighborhoods you want to settle into. The agent will be familiar with the styles of homes in established communities that he or she has previously worked in and will be familiar with developers in the newer neighborhoods. If you’re looking for a condo, find a real estate agent who has sold multiple units in the buildings you’re interested in. If you like ranch-style houses, get an agent that has done extensive work in a neighborhood where that motif is common.
Creating a Wish List
Making a detailed wish list will help give your real estate agent an idea of where to start looking for your new home. Your wish list should include home styles as well as neighborhoods. Be sure to also list the things that you feel are important for your new community to have: good schools, access to public transportation, proximity to restaurants and shopping, etc. The agent might even provide you with some suggestions of neighborhoods that you had never even considered before but meet the criteria on your wish list.
What to Expect During Your Home Search
Remember, patience while searching for your dream home is key. It isn’t often that first time buyers strike gold with the first house they are shown. Take time to see as many homes as possible in order to make notes and compare the pros and cons of each property. Keep in mind that while homes that require only minor renovations to become your ideal house are okay, you want to avoid houses that need major work done to meet your standards, as this can be an extremely costly and time-consuming endeavor. Instead, select a home that meets as many of your criteria as possible without over-exceeding your budget.
Buying a first home is a giant leap in life. Luckily, with the proper preparation, that leap can be broken down into smaller steps that make the process much more manageable and far less stressful.
Your real estate agent is the best source of information about the local community and real estate topics. Give Kevin Cooper of Bean Group a call today at 603-657-6787 to learn more about local areas, discuss selling a house, or tour available homes for sale.