You can avoid some common first-time home buying mistakes and may save yourself money and time as well if you educate yourself. The journey toward buying your first home can be rewarding, or problematic, so read on and find out what to know before you buy:
Don't Go It Alone: Trying to find your dream home by scanning online or newspaper listings can be a fruitless pursuit. Getting an agent to help you in your search will benefit you in countless ways, from understanding the financing process and how much house you can afford to locate that perfect property before it even goes on the market, a real estate agent is worth their weight in gold.
Educate Yourself: You may find yourself back in class when you apply for financing now; lenders are increasingly requiring applicants to take financial classes to be better prepared for the financial impact that buying a home can bring. Even in the absence of such a requirement, you would be wise to study up on financial issues like budgeting, how to know how much home you can afford, dealing with unexpected expenses during the financing process and afterward, and more.
Get Your Financing In Order: Real estate markets everywhere have not only rebounded but are actually quite competitive and often favor the seller. In that type of market, you must be ready to make an offer quickly to get what you want, and having your financing approved ahead of time is vital. Getting a pre-approval also lets you know what price range your home search should encompass and how much you need to set aside for the down payment and closing costs. To apply for approval, be ready to show your pay stubs, tax returns, bank statements and more.
Set Realistic Expectations: Most people think that they can afford a home that costs approximately three times their yearly salary, but hopefully you will do a bit more research before you begin home shopping. Everyone has different situations and priorities, so instead of listening to old wives tales, listen to the advice of your real estate agent and your lender. Remember too, that the top amount you can afford, according to your lender, is not the minimum you can afford but the most you can afford.
Don't Stop at One Lender: Just because you have an approval from one lender doesn't mean that you have attained the best offer when it comes to your mortgage. Rates vary quite a bit, and it can pay off handsomely if you shop around the for the best deal no matter who you have been working with up to now. Remember, when dealing with large numbers, even a percentage of a point can mean a great deal of money saved on an interest rate.
Contact local real estate communities for more information and assistance.