Buyers' Tips!

So you're interested in buying a home, but you have no idea where to start. Let us help! Continue reading to find out a few helpful tips for buyers!

  • Know how much home you can afford. Take advantage of online calculators to calculate what is realistic based on your income, debt, and credit. The general rule of thumb is to keep your housing expenses (mortgage, property taxes, and homeowner's insurance) under 28% of your gross monthly income.

  • Explore mortgage options. There are a variety of mortgage options that you might qualify for, including FHA loans, conventional mortgages, USDA loans, and VA loans. See which type would be the best fit for you and determine if you want to opt for a 15- year mortgage or a 30-year mortgage. If this is your first time buying a home, research first-time buying assistance programs to save more money!

  • Check and improve your credit score. You can use websites or apps like Credit Karma to track your credit score. Pay your bills on time and keep your credit card balances low. Keep current credit accounts open because closing an account will temporarily drop your score. Your credit score will determine your eligibility for a mortgage and affect your interest rates. Improving your credit score can take some time, so keep this in mind if you think you might want to buy a new home in the near future.

  • Get a pre-approval letter. A mortgage pre-approval letter is a lender's offer to loan you a certain amount under specific terms. Having this letter shows the seller you are a serious buyer and gives you an edge over other potential buyers who have not made this step.

  • Save for closing costs. Closing costs include more than just the selling price of the home. On average, closing costs are about 3-4% of the purchase price of the home. Plan to save for costs such as an appraisal, home inspection, attorney's fees, homeowner's insurance premiums, and property taxes.

  • Don't make any big credit purchases before you close on your new house. Even after you have your pre-approval letter, the mortgage process still isn't over. Your lender will check your credit again on the day of funding. Opening new lines of credit will drop your score and can possibly result in a delayed closing date or even denial of a mortgage. You do not want to be denied for a mortgage because you bought a new washer and dryer or refrigerator too soon!

  • Know your non-negotiables and nice-to-haves. If you have outdoor pets, do you need a large backyard? Do you need to be in close proximity to elderly family members? Is a swimming pool a necessity or a nice-to-have for your family? Knowing what your non-negotiables are will save you from wasting time looking at the wrong houses.

  • Don't skip the home inspection. The home may look flawless, but spending the money on a home inspection may real deeper serious issues and could save you some major money in the long run. You don't want to buy a house and then find out you have dangerous foundation issues two months after moving in.

  • Know your DIY limits. Renovations can be costly. If you are tackling the repairs on your own, find out how much the materials will cost to complete your project. If major repairs are needed, make sure to include those costs in your budget. If you have any doubts, then feel free to get an estimate from a professional before making an offer and signing a contract.

  • Hire the right real estate agent. Real estate agents have access to the Multiple Listing Service (MLS) website, which is the gold mine for finding new listings as soon as they are posted. For a first-time buyer or even a fifth-time buyer, all the paperwork can be confusing and overwhelming, but real estate agents can simplify the process, give you clarity, make sure no necessary steps are missed, and check for any code violations. When it comes to negotiating a contract, real estate agents are there to fight for what is best for you! They know what questions to ask and what to look for.

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