Buying your first home is exciting and scary all at the same time. How do you know you are doing it right? Are you buying too much home or too little home? Is the interest rate right? What type of loan should you get?
These are just a few of the questions that go through the first-time homebuyer’s mind. If you want to know the answers, you just need to know the habits of the highly effective first-time homebuyer. The homebuyer that walks away from the transaction feeling good about his decision and the one that gets maximum benefit from the investment in the end.
So what are those habits? We list them below.
Get Pre-Approved Early
Wouldn’t you be better off knowing what you can afford long before you start searching for a home? What good does it do you to shop for homes that are outside of your price range? Get with a lender, discuss your financial situation, and see what type of loan they will give you.
Getting pre-approved isn’t a commitment to take the loan. It’s also not a commitment for the lender to give you the loan. It’s an approval based on what the lender sees at this point in time and it’s a way for you to see just how much loan you could afford. It’s then up to you to put that loan into your actual budget and see how it plays out. Can you afford the payment? Will you have enough disposable income each month? These are the questions you can ask yourself long before you ever sign on the dotted line.
Make a List of Wants and Needs
There is a difference between wants and needs. Sure, you may want a six-bedroom house with a pool and sunroom, but do you need it? How many bedrooms are necessary to accommodate your family now or the family you intend to have? How many square feet are necessary for everyone to live comfortably? What features do you need in a home to accommodate your family? These are your needs.
Then you can make a list of your wants. These are the things that you would like to have, but honestly could live without. Going back to the pool and sunroom – these are wants. They aren’t required in order for you to live comfortably in the house, but they sure would be nice. Other wants could include hardwood floors or granite countertops. Again, you don’t need them, but sure would love to have them.
Don’t Be Afraid to Ask Questions
You are a first-time homebuyer, everyone expects you to ask questions. No question is too big or small and no question is ever dumb. Ask questions of your real estate agent, loan officer, and anyone else involved in the process.
Don’t rely on the fact that your real estate agent and loan officer will tell you everything you need to know. They are human too and they forget things. Plus, they have no idea what you do and do not know. That’s why you have to ask the questions in order to get the answers and information that you need.
Don’t Try to do it on Your Own
Finally, don’t take the burden of handling the process on your own. You need professionals helping you, that’s what they are there to do. A real estate agent has your back in the entire purchase process. He helps you find a home, decide if it’s right for you, and even does the negotiating for you. If you don’t want to, you never have to have contact with the seller. Your real estate agent does the paperwork and executes the purchase contract for you.
Your loan officer helps you through the loan process. You want to choose a lender that has a loan officer that you connect with easily. You want this person to be someone that you are in contact with often, even daily. This way you’ll always know the status of your loan, what the underwriter may need, and what you’ll need to close on the loan.
These simple habits will set you up for success as you set out to buy your first home. Getting the help that you need, knowing how much you can afford, and making sure you don’t get in over your head is the best way to ensure a positive first-time home buying experience.