Have you been throwing around the idea of buying your first home but don’t know where to begin? You’ve come to the right place! Whether you are planning to purchase in the next three months or twelve months, or you are just curious about what home ownership might look like for you, here are a few simple tips to get you on your way to your real estate goals.
The best thing you can do to avoid confusion and put a plan into action is to find a real estate agent. The primary reason for this is they know what it takes to be a home buyer in the current market. They can help you find clarity as to what it will take to be a first time home buyer.
When searching for a real estate agent, as a first time home buyer, there are a few key things you will want to look for. First, their personality. You want to be able to enjoy having conversations with that person because you will be having many. It is also important to find someone who will be a teacher and resource for you throughout the process. Equally important is the agent having trusted lender partners who participate in helping first time home buyers put a SMART home buying plan in place.
Once you are working with an agent and a trusted lender, they will review a few areas with you. A good starting point is to review your credit. Your credit score will determine what programs you are eligible for and what your interest will be. The higher your credit score, the lower your interest rate, the more home you can afford. Most lenders have programs or credit repair specialists whom they partner with who can advise you on how to improve your score immediately and what things might continue to improve it over time.
Next, you will review your housing budget and how that translates to the homes available in the market. It is really important to discuss the difference between the total purchase price you are qualified for and the purchase price that has the most comfortable payment for your budget. Especially when purchasing your first home, you want to make sure that you are comfortable with the monthly budget that you choose and to take into consideration the repairs that come with home ownership.
After reviewing these two items, you will have a better understanding of the down payment you will need, or if there might be a down payment assistance program available for you. For a lot of first time home buyers, this is the biggest moment of hesitation in the purchase process because they have a misconception of how much they need to bring to the closing table. This clarity will allow you to save with a true number figure as a target versus saving blindly. It also typically encourages saving the funds more quickly.
These few steps are very important before you begin shopping for your home. It is heartbreaking when someone finds a home before going through this process and then finds out they are not quite ready financially to purchase. Once you have a SMART plan in place, you will have more confidence and feel more in control of the process when you are ready to make your move.