Buying your first home can be an exciting, but also daunting, experience. However, there are ways to approach it feeling a little more confident than you do now. Here are some tips to get you started:
Start saving early
The more you have for a down payment, the less you’ll have to pay in the future. The number you should be shooting for is 20% of the overall payment, so if your max-budget is $200,000, then you should have at least $40,000 saved up before you start looking at houses. And if you need some saving tips, then check out our guide here.
Make sure you’re pre-approved
Start first by comparing mortgage rates from at least three lenders, then work on getting pre-approved. Take note, though, that being pre-approved is different from being pre-qualified, as the latter simply gives you an estimate of how much the lender is willing to give you, while the former is an official confirmation that they’re willing to lend to you and under what terms. A pre-approval letter will give you extra security when it’s time to put in an offer, and it will also make you look like a serious buyer to a seller. However, keep in mind that a conventional loan is not the only option available to you, and that there are other options for you to consider.
Research the type of house you want
Before you set out, figure out what exactly you’re looking for in a home. Do you want a garage? Spare bedroom? Large yard? It’s best to stay practical, as no home will have everything you want, so determine what you need and what you can compromise on. You should also keep one eye on the future; even if you don’t need three bedrooms now, for example, you might in the future.
And research the neighborhood
Next you should determine what neighborhood suits you best. Research the schools (even if you don’t have children, school ratings impact home value), crime statistics, and be sure to drive through the neighborhood on different days and times to get a better feel for what it’s like. And, again, keep one eye on the future by paying attention to the growth rate of the neighborhood (if a neighborhood is in decline, your re-sell value will drop).
Hire a real estate agent
At the end of the day, you can’t do this whole process alone. A real estate agent will be able to answer any questions you have about a home, neighborhood, or just home-buying in general. They are the experts, after all, and when this is your first home-buying experience, it’s best to surround yourself with as many experts as possible.
Still have questions? Then feel free to contact Dan Senecal. With his twenty years of experience, Dan will be able to answer any questions you have about the home-buying process, so give him a call at 406-439-5414 to get started.