Tips For First-Time Home Buyers
With low interest rates, a good availability of homes and a market that makes it cheaper to own than to rent, there's never been a better time for the first-time home buyer. Here are tips to acquiring your first abode.
Do a credit check: It's a great time to purchase a home if you've got good credit!
Down Payments: Many first-timers don't have the cash to put down 20% of a home's value. No need to worry as Uncle Sam offers a handful of government-backed loans with 0% to 3.5% down. Check with your lender about options.
Get pre-approved by a lender or mortgage broker. Pre-approval can help expedite the closing of your purchase, a process that given the current economic climate can take months.
Check the selling prices of comparable homes in your area. Web sites such as Zillow and Homegain can give you a general idea of what you should expect to pay. You can also do a quick search of actual MLS listings in your area on a number of Web sites, including the site of the National Association of Realtors.
See what you can afford: Use a mortgage calculator to see what your payment would be.
Remember, you need to include taxes and homeowners insurance as part of your total monthly payment.
Closing Costs: Find out how much you'll likely pay in closing costs. The upfront cost of settling on your home shouldn't be overlooked. Closing costs include origination fees charged by the lender, title and settlement fees, taxes and prepaid items such as homeowners insurance or homeowners association fees. If you are purchasing a new home, many builders have programs available to offset closing costs.
Budget: Look at your budget and determine how a house fits into it. Fannie Mae recommends that buyers spend no more than 28% of their income on housing costs. Go much past 30% and you risk becoming house poor.
Work with a Pro: Talk to reputable real-estate agents to assist you in the purchasing process.
Look at the big picture: While buying a house is a great way to build wealth, maintaining your investment can be labor-intensive and expensive. When unexpected costs for new appliances, roof repairs and plumbing problems crop up, there's no landlord to turn to, and these costs can drain your bank account.
Do you think you're ready to pull the trigger for a new home?
When we purchased our first MasterBilt home we were overwhelmed by the amazing customer service we received. The craftmanship and attention to detail was outstanding. So when our family expanded and we needed a different home we looked no further than MasterBilt to build for us a second time.