As a first-time home buyer in today's technology-based society, it's a sure bet that you have spent some time doing research to learn as much as possible about available listings in your local real estate market and how price points and inventories are trending. Taking this type of initiative to educate yourself about your local real estate market is certainly commendable and will be a factor in your overall success.
What you may not have paid enough attention to, however, are some of the old-school ways that have guided successful real estate purchases for generations in the past. If you are preparing to make your first home purchase and want to use a well-rounded strategy to increase your degree of success, adding these three steps to your plan will help you enjoy a more satisfying buying experience.
1. Postpone plans to purchase until you are free of consumer debt
Monthly bills for credit cards, auto loans, and school loans can make it difficult to pay for all the costs associated with becoming a homeowner. Instead of just a rent payment, homeowners must be sure that they can cover the cost of the mortgage payment, plus taxes, insurance, HOA fees, updates, and emergency repairs. Freeing yourself from consumer debt before purchasing a home is the best way to ensure that buying a home will continue to be affordable throughout your ownership.
2. Save up and put twenty percent or more down on the purchase
While many home loans are currently available for buyers, who have nothing or very little to put down, accepting a no- or low-down payment loan almost always means paying prime mortgage interest (PMI) which can add a hundred or more dollars to each payment. Since this money is not applied to the principal, buyers are essentially paying an extra monthly fee because they chose not to put twenty percent down at the time of the purchase. Living frugally and saving up twenty percent down before buying will prevent buyers from having to pay these extra monthly costs and give them the bonus of being in a favorable equity position from the first day of ownership.
3. Avoid the DIY approach
Another common mistake that today's technologically astute buyers often make is to avoid using a real estate professional to assist them in the purchase. Instead, they use a variety of apps and DIY sites. But doing so robs them of the educational benefits that the first home purchase can offer and means that no one is there to help them avoid the potential pitfalls.
Instead of thinking that you can find all the answers online, take time to visit with a caring, experienced real estate professional before you begin the process of looking for your first home. Their local market knowledge, negotiation skills, and ability to shepherd difficult transactions to a successful closing are just a few of the benefits they offer each of their clients.