Buying your first home can be quite intimidating. Figuring out who you want to trust, where you want to live and how much you can afford are only a few of the questions boggling your head right now. Since you are reading this blog you are already taking a step in the right direction. Here are a few tips from Investment Title on how to prepare for buying your first home.
1. Check and Work on Your Credit: This is the first thing you need to do when the thought of buying a home pops into your head. You will want to check on your credit score and reports. You should especially look for errors or any past-due accounts that may have gone to collections. While they may not be an urgent issue it can be down the road when you apply for a home loan. The best way to stay on top of this is by signing up for a credit monitoring service, that way if something changes you will get notified immediately. You’ll want to hold off on any other large credit purchases if you are seriously considering buying a home in the near future.
2. Budget: Setting a budget is key whether it’s your first time buying a home or fifth. Before you start browsing at homes you should be able to answer these questions. What is the most I can afford? What is my ideal price range? What other costs besides the house do I have to pay for? Many home buyers neglect to think about the additional costs that come with buying a house such as the property taxes, homeowners insurance, any improvements or maintenance for the house, closing costs, moving expenses, title insurance, etc. [SA1] There are several websites that can help you calculate how much specific things will cost and you should definitely bring up your budget with the lender when you get to that step. For example, if you want to know how much your title insurance is going to cost you can check out our calculator.
3. Make a List of Must Haves: In your head, you probably have an idea of what you want vs. need in a house. Writing this down on paper will help you negotiate what is a necessity. Decide on an area you want to live in and think about the school district, whether it’s close to work, family and friends. A great way to narrow down your list is to visit open houses in the area you want to live in and get acquainted with the market. Chances are you won’t find everything you want in one property. Your list will probably change as time goes on but think about the main things; location, square footage, amenities etc. Ask yourself, what can you live without?[SA2] Pretend you are on HGTV!
4. Use Experienced Professionals: Finding a trustworthy team is one of the most important parts. You will be working with these people during the entire home buying process. The most important person to think about is a real estate agent. They should have knowledge of the area, be a good listener/executor, have many contacts, offer tips and tricks, and lastly, they should make this process as stress free as possible. The best way to find a good real estate agent is to talk to family and friends in your area. You will mostly rely on your agent but there are plenty of other people involved in this process you are just as important. If you’re wondering, here is a list of all the other people involved:
- Loan Officer: Helps to get you pre-qualified with an up-front credit approval. They will also explain all of your loan options and collect any necessary documentation.
- Home inspector: Provides a professional opinion of the physical condition of the home, its components and systems.
- Appraiser: Provides opinion of the market value of your home.
- Insurance Agent: Provides protection of your finances.
- Title Officer: Examines public records to determine that the rights to a property can be legally transferred from one owner to the next. Investment Title can help with this one! Contact us with any questions.
- Escrow Officer: Ensures completion of all requirements from each party before the money transfers hands.
This probably seems like a lot of people but if you have an experienced team everything will go smoothly.
5. Take Your Time: Buying your first house can be extremely exciting and you may be ready to get out of your current accommodation right now. Do not be afraid of missing out on future price gains or being “priced out of the market”, the right house will come at the right time. If you have saved up as much money as you can then go for it. But don’t rush yourself into buying a house you don’t like. While it is important to be ready to buy a house financially, it is equally as important to be emotionally ready. Look at your life, your career, your finances and your future expectations, and determine whether buying a house is the right move at this time
Preparation is the best thing to do when you're in the process of buying your first home. Read up online and talk to your friends and family. Remember, this is likely one of the biggest investments you will make so don’t make decisions lightly. Investment Title wishes you the best of luck in your home buying process and we hope to help you along the way.
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