Tips For First Time Homebuyers

Getting the home mortgage that is right for you can be difficult, especially for first time home buyers. What other difficulties might first time buyers face? Being prepared is the best way to face any life challenge. What should you do to make yourself ready for such a major change in your life?

Research is key. Find out how much the other homes in your target area are selling for. Getting a gauge of the property values in that space will help you in figuring out the right price of the property or give you an edge in negotiating. There are many resources and listing services that have such information.

Figure out what your monthly housing costs, including home insurance and taxes, would be in the area. Some locations can have a significant effect on those payments. Call a local or knowledgeable insurance agent to get an estimate where available. Local agents may know more about any area specifics, such as tax laws. You can also look up the property appraiser’s information on their websites to have an idea of your taxes.

Don’t forget about the closing costs either. Be aware of things like taxes, title and settlement fees, lender’s origination fees and prepaid items (homeowners insurance, homeowners association fees, etc).

Budget yourself so that you pay no more than 30% of your income into your house. Even 28% is a good limit. Make sure you have the budget for a house. Keep in mind that there may be costs you don’t anticipate. Repairs, such as plumbing and roofing, or even new appliances can come up. Plan ahead to know if you can mange those costs.

Having credit issues can affect your plans. Always be aware of your credit when you go into home buying. Get a credit report and look for any issues or errors. Be sure to correct them as soon as possible. Having your other documents at the ready will be useful too. Statements from current loans, tax returns, pay stubs, W-2s, bank account statements, etc.