First Time Home Buying Tips to Consider
Are you thinking about purchasing your first home? If so, odds are you have Googled what you need to do and have likely been bombarded with millions of pages of information. Some true, some false, some good, some bad. So, here are a few tips that will apply to pretty much any first time home buyer that is hoping to purchase their first property.
Explore Your Down Payment Options
The struggle to come up with enough money for a downpayment is real, and it is something that the majority of first-time owners have had to deal with. However, there is help – if you qualify. Try Federal Housing Administration loans, which permit down payments as low as 3.5% as opposed to the traditional 10-20%. Another popular option as of late is crowdfunding. Take some time and research State and local assistance programs – these exist in addition to the numerous federal programs that are out there. In fact, many states offer assistance programs for first-time home buyers that have perks like interest-free loans, tax credits, and low down payment options.
Remember to Budget for Your Closing Costs
A lot of first time home buyers tend to forget that in addition to saving for a down payment, you also need to budget for the closing costs. In other words, you need money to close your mortgage – which is often between 2 and 5% of your loan. Now, you can shop around and compare prices for certain closing expenses, these include things like homeowners insurance, title changes, and home inspections. However, they are still going to be an extra cost that needs to be budgeted for.
Consider What Type of Property You Ought To Buy
Many people enter the real estate game assuming that they will purchase a single family home. However, if you’re willing to sacrifice space for less maintenance and extra amenities, and you can afford a monthly homeowners association fee, a condo or townhome could be a better choice. Often these have a lower asking price, and because of the maintenance already being covered, you don’t have to worry about repairs to your roof or windows, shoveling, or lawn maintenance.
Don’t Forget to Negotiate
A lot can be up for negotiation throughout the homebuying process. This can result in major savings for the buyer. Keep track of any major repairs that have to be done. Can you get the seller to fix them or cover the cost? Is the seller willing to pay for any of the closing costs in turn for a faster closing date? If you find yourself in a buyers market, you may find the seller will negotiate more with you. Always speak with your real estate agent as to what you can negotiate on, and how you can bring the price down.
Remember to Purchase Homeowners Insurance
Before you close on your new house, the lender that you are working with is going to require that you purchase homeowners insurance. This is a big deal and absolutely crucial to your getting your mortgage so take some time and shop around and compare rates to find the best price. Ask questions and learn what’s covered in the policies. Remember that while it might be tempting to, choosing to go with a less expensive, more budget-friendly policy generally means fewer protections and more out-of-pocket expenses if you file a claim.