Buying your first home can be one of the most exciting times of your life – and the most nerve-wracking. There’s a lot of paperwork to keep track of, showings to schedule, and homework to do on your end as a qualified buyer. So where do you start? Here are a few tips for first-time home buyers!
Identify Your Ideal Home Features
What are your homeownership goals? Are you looking for a single-family home? A new build? A starter home or a fixer-upper you can invest in? Once you decide this, you can decide which property best suits your needs. We love this tip from Investopedia: one of the best ways to start is by making a list! Make a master list of features you’d like your home to have. Include anything from the size and square footage to outdoor space, or even appliances and architectural details. Dumping all these desired features in one place will help you sort out what is a hard-line need and what is a more flexible want.
Check Your Credit Score and Evaluate Your Assets
A home buyer’s (or potential buyer’s) credit score is one of the most important factors in qualifying for a home loan. Check your credit and FICO score well in advance of beginning your house hunt. Look through your credit report for any unpaid accounts and how much of your credit limit you are utilizing. Even if you don’t owe anything or if you owe some, but your payments are always on time, still consider your assets and how you spend your money. What is your cash flow like? Do you have other debt or loans – student, cars, etc.? Your credit score and spending are all factors that influence what lenders will ultimately give you.
Get Pre-Approved for a Loan
Meet with a mortgage specialist, broker, bank, or lender, and find out how much you can actually spend. In getting pre-approval, you are receiving a written promise that grants you a loan up to a certain amount. This is important and helpful – especially for first-time buyers – because you may think you can afford a certain amount, but lenders will help you find out what you are truly qualified to spend. Sitting down with a mortgage specialist will also help you understand what your potential down payment, monthly payments, and other payments may look like.
Plus, having a statement of pre-approval before you begin house hunting provides 2 great benefits. You can refine your home search based on your loan (which is great, because looking at dozens and dozens of homes in a broad search can be exhausting!). And, having pre-approval makes your life easier when it comes time to make an offer on your dream home. Securing financing takes time, and you don’t want to wait to make an offer if you’ve found your dream home! You’ll be thankful you pre-approved when it comes time to start closing on a home.
Do Your Research
Now that you know the full scope of your finances, you’re ready to start house hunting. Be thorough! Find out what the neighborhood you’re looking in is like. Friendly neighbors? What sorts of shops, grocery stores or community centers are nearby? What are the schools like? How much are property taxes in that area, plus other costs? What about homeowners’ insurance? Consider other things, too, like what kinds of updates or renovations the property may need now or in the future… What will those costs look like down the line, and can you afford them?
Ready to start your first time home buying hunt? Contact Krueckeberg Auction & Realty today, and a member of our team will be happy to help guide you through the process! We have a phenomenal staff of realtors and brokers ready to help with any of your home buying needs or questions. Pre-approved and looking to learn more about specific homes? Check out our real estate listings that are up now.