13 First Time Home Buyer Tips You Should Know Before Buying A House

Dated: October 2 2020

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13 First Time Home Buyer Tips You Should Know Before Buying A House

                                        

Here are 13 first time home buyer tips in 2020! This video below in the link, as well as this blog, has what you should know before buying a house! Buying a house for the first time can be stressful especially if you're not how to go about it. I learned that quickly when I first got into real estate, and I hope these first time home buyers tips and advice can help you. 13 First Time Home Buyer Tips

Save money.

I know there some down payment assistance programs out there, but it's always better in the long run if you have some money saved up for a down payment, closing costs, and an emergency fund just in case anything were to happen.

Lower debt to income ratio.

This is when you divide the amount of debt that you have by the income you make. For example: if all of your monthly expenses are $1000 and you make $5000 per month. Your ratio will come out to 20% because 1000/5000 is .20. It's ideal to have between 25-30% but I have seen lenders go up to 41-43%. That high of a ratio isn't the best, but if you have to go with that, I understand. If you CAN lower it, please do so.

Keep track of your credit score (helps with interest rate).

You'll want to keep track of your credit score of the reason why we always say that, keep a pulse on it, or anything like that is because the interest rate is based upon your credit score. They can base it off of 720 and up, you got a great score; 720-680 is good; 680-640 is fair; and then 640 and lower needs work.

Rate shop.

What you'll want to do is talk to a few lenders or mortgage brokers to see what they can do for you as far as getting the lowest rate or minimizing the total cost of your closing costs.

Get pre-approved for a loan.

You won’t know for sure how much you can spend at home so you can get preapproved with a lender. It'll also let you know what area you'll be able to live in and/or how close to those areas you would be able to live. A side note; you don’t have to go to the maximum amount of your preapproval unless you feel the need to; but in most cases, my clients haven't gone up to their maximum amount.

Visit neighborhoods.

After speaking with a lender and realtor and figure out will you be working with. You'll want to check out what neighborhoods you're interested in. I suggest visiting during the day and night especially on the weekends where most people aren’t working so you can see the most active that it will be.

Have contingencies in the offer.

When you make an offer you want to make sure that the offer is contingent upon a couple of things such as: inspections, appraisal, the loan. You just want to make sure that you have some kind of safety net that way if anything happens you won't lose your deposit.

Monthly payment vs overall price.

Look at the monthly payments versus the purchase price and it can look like a lot of money but depending on the amount of down payment you have, having a $1500 per month payment could be a $350,000 home. 

Know about closing costs.

Knowing what's included in your closing cost is important. What I do is I will get you an estimate of the closing cost beforehand. The general breakdown of the costs are escrow fees, title fees, city and county transfer tax fees, impound account/supplemental tax fees, property taxes, insurance, and lender's fees.

Comfort in the difference.

Try to be comfortable in the difference in the estimates from the beginning of the transaction to the end. To avoid any surprises, what I do is before getting the contract, I usually make an estimate of what the closing costs could be in the worst-case scenario. That way if there is a difference in the estimate, my clients aren't affected by it.

Have the mindset of this as an investment.

You should think of this as a long term investment. I wouldn't expect a return on the investment anytime soon such as in the next year, but over time you could start to see it from the appreciation of the property. Some factors that affect appreciation are directly making upgrades to your home or indirectly which is the neighborhood, location, and time.

Ask questions.

Don't be afraid to ask questions anytime in the process even if we went over it earlier. It can be a lot of info within the time span and can be hard to remember. So please ask away.

This is about you.

This is the biggest to me. I've seen people rush into it because of either family, friends, a lender, a realtor, and social media has pressured them into buying a home before they're ready. So remember, this isn't about anyone else but YOU!

I really appreciate you taking the time to read this. If you have questions, feel free to ask away!

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Chris Haith

Chris Haith is a young, energetic Realtor that's passionate about serving his clients. ​He strives to be attentive to his client's needs and to be available. He will always communicate in any form s....

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