Monday May 22, 2017

First Time Home Buyer Tips

Seven Questions People Often Ask When Purchasing A Home

The majority of first time home buyers are conflicted about what they should and should not do during the home buying process. Each day new questions are coming forth about the expectations of first time home buyers.

Listed below are seven common questions first time home buyers have about the entire process. Use the answers from these first time home buyer tips to help you wade through the process.

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First Time Home Buyer Tips – 7 Questions and Answers To Help You Get Through The Confusing Home Buying Process

There are several first time home buyer tips to keep in mind as you’re shopping around for the home you want to settle in. With these first time home buyer tips, the entire process can go rather smoothly.

Q1 – What benefits are there for buying rather than renting?

Home buying is an investment that, generally, increases in value. It also gives you additional privacy, freedom and enjoyment. Plus, the mortgage interest is tax-deductible and results in great yearly tax savings.

You can find more information on this benefit in the 6 Reasons You Should Buy Your First Home article.

Q2 – Once the essential bills are paid and food is bought, there’s little money to save for a down payment on a home. What can be done about this?

This is a Catch-22 situation. First off, owning your home means you have equity, which is a great source of money for a down payment on your next home. However, when you’re a first time home buyer, there is no equity and you must come up with the money some other way.

Saving money can be a really difficult thing to do. The majority of states and the Federal Government offer assistance for prospective homeowners. Read more of the first time home buyer grants to find out more and learn what’s available.

Q3 – Home prices are fairly high. Is there harm in waiting?

It probably wouldn’t hurt to wait to purchase a home. After all, prices may come down…come down a lot actually. Keep in mind though that home prices are connected to interest rates.

When interest rates fall, home prices are generally more affordable, which causes prices to rise for buyers. When prices fall down, interest rates rise up.

For example: you’re looking at $150k list price home. Interest rates are at 6.5 percent, which means your monthly payment would be close to $975. If the rates continue to increase, the home price could fall to $100,000. However, an interest rate of 10 percent at $150,000 means the housing payment will be more than $1,300 a month.  

As you see, the savings you get from the home’s cost can be offset by the increase of the interest cost because of a higher interest rate. 

Q4 – Is there really a need for a real estate broker?

It’s always best to use a real estate broker since anything entailing the home buying process can be rather hectic and overwhelming. With the help of a good real estate professional, you’ll be guided through the process so that the experience is much better for you.

This broker should be acquainted with the important things you want to know about the neighborhood including but not limited to:

  1. Safety
  2. Children
  3. School quality
  4. Volume of traffic

Your real estate agent can help you determine what price range is best for your household budget, look at the classifieds and look at multiple listing services. Your agent will have instantaneous access to new listings once they hit the market, which can save you hundreds of hours spending time looking at places you might want to call home.

When you’re ready to make an offer on the home of your choosing, the broker will look at all the ways you can save money. They’ll explain the different advantages and disadvantages on the variety of mortgages, help you to understand the paperwork and answer any questions you may have when you’re signing the paperwork at closing. Best of all… you don’t pay a dime!

So how does the broker get paid? In this case, the broker is paid by the home seller.

Q5 – Is it best to improve the credit score before applying for any first time home buyer loan?

The answer to this question is a resounding yes! You’ll need to take at least two months to get your credit back into shape but it’s well worth it… in the end. After all, the higher your credit score is, the greater the chances of being approved for the loan and getting the lowest rates possible. Consider getting a free credit report.

Q6 - Is it a good idea to pre-qualify for a mortgage?

When you and your spouse are looking at homes, it’s a good idea to know in what price range you would qualify for. The reason is that you don’t want to be looking at homes higher than you can afford to pay on.

On top of that, if you make an offer to a seller, you want to be sure you can buy it. Plus, the seller’s mind is put at ease, and you can negotiate for a reduced price on the home.

Check out the First Time Home Buyer Grants about free assistance with your down payment. You can also find out how you can qualify for the first time home buyer loan.

Don’t forget to check out the First Time Home Buyer Programs to learn about the other types of assistance.  Use any and all of these first time home buyer tips to give you the smooth transaction you want for your first home. 

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