What First Time Homebuyers Need to Know

The first time you go to buy a home, the process can be overwhelming and confusing. Not only do you need to have a thorough understanding of your own financial situation, and how it applies to purchasing and lending, but you need to have a decent handle on the real estate market and what is, or isn’t, needed to purchase the home you are hoping for and still get a good deal out of the arrangement.

Fortunately, for first-time homebuyers, there are plenty of resources available to help you get up to speed (plus a few perks as an incentive for you to step into homeownership).

Know What You Want vs What You Need

Many first-time homebuyers are looking for the perfect dream home. They soon discover that it’s quite difficult to match the vision they had once the reality of what’s available becomes apparent. It’s important, before you go house hunting, to know your goals. 

Here are some questions to ask yourself:

• What do you absolutely need to have? 
• What are the non-negotiables? 
• Where are you willing to compromise?

Inevitably, you’ll have to compromise somewhere. Things move quickly out there, so have a good idea of where you can bend, if needed.

Get Pre-Approval

Getting pre-approval for your mortgage is a very useful tool in the budgeting process. Affordable calculators allow you to quickly view the monthly repayments of various loan products based on current market interest rates, but pre-approval provides a more detailed and personalized view of your loan options. It’s also a great way to show real estate agents and sellers that you’re serious about buying real estate. By sharing important financial information with lenders, you can see eligible interest rates and the maximum amount you can borrow from your lender before you fall in love with a house. This will allow you to move quickly on a home you can’t be without.

Watch Out for Hidden Fees

The mortgage loan is just one aspect of home purchasing. The moving and closing costs often catch homebuyers by surprise!  Closing costs include attorney fees, appraisal costs, title insurance, and other fees. The total amount is due when you sign the dotted line at closing (usually 3-5% of the loan amount) so it’s best to be prepared. The cost to move is no joke either as you’ll need to figure out your strategy for relocating your furniture and belongings and any repairs or upgrades you’d like to make to the home before moving in.

There is a lot of moving parts to the homebuying process so take it slow, be informed, prepare as much as you can and, before you know it, you’ll be residing a home of your own.

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