Here's what every first-time home buyer needs to know to begin house hunting with confidence
1. How much home you can afford as a first-time home buyer
Homes cost a bundle, so odds are you'll need a home loan and a down payment. Still, the question remains: What price home can you really afford? That depends on your income and other variables, So, contact your Bank or Mortage lender to help you with your financing options. There are lots of programs and plans availale. It is not a one size fits all.
2. Find a Real Esate Agent
You buy most things yourself—at most, sifting through a few online reviews before hitting the Buy button and making a payment. But a home? It's not quite so easy. Buying a home requires transfer of a deed, title search, and plenty of other paperwork. Plus there's the home itself—it may look great to you, but what if there's a termite problem inside those walls or a nuclear waste plant being built down the block? Call me to help you navigate all the uncertainties.
There's also a whole lot of money involved. (You know, a down payment, loan, etc.) Don't leave it to chance
3. Know there is no such thing as a perfect home
It's your first home—I understand if you've dreamed about the ideal house and don't want to settle for anything less. I've been there! But understand that real estate is about compromise. Make a list of the must haves and then begin your search with an open mind.
4. Do your homework
Once you find a home you love and make an offer that's accepted, you may be eager to move in. But don't be hasty. Don't purchase a home or make any payments without doing your due diligence, and add some contingencies to your contract—which basically means you have the right to back out of the deal if something goes horribly wrong.
The most common contract contingency is the home inspection which allows you to request a resolution for issues (e.g., a weak foundation or leaky roof) found by a professional.
Another important first-time home buyer addition: a financing contingency, which gives you the right to back out if the bank doesn't approve your loan. If they believe you'll have trouble making a payment, a mortgage lender will not approve your loan. A pre-approval makes the possibility of having your loan application rejected much less likely, but a pre-approval is also not a guarantee that it'll go through.
You also might want to consider an appraisal contingency, which lets you bail if the entity who is giving you a loan values the home at less than what you offered. This will mean you will have to come up with money from your own pocket to make up the difference—a tough gamble if cash is already tight.
5. Know your tax credit options
The first-time home buyer tax credit may be no more, but there are a number of tax breaks new homeowners may not be aware of. The biggie: Mortgage interest deduction is a boon for brand-new mortgages, which are typically interest-heavy. If you purchased discount points for your mortgage, essentially pre-paying your interest, these are also deductible.