You’ve made the decision to make one of the largest investments
you’ll ever make in your life-buying your first home. You’re
excited, but at the same time anxious. Some of the questions you may
be asking are: Will I be able to afford the home of my dreams? Do I
have enough money for a down payment? Can I get a home inspected before
I make an offer?
Rest assured, you are not alone. According
to the 2000 National Association of REALTORS® Profile of Home
Buyers and Sellers, first-time homebuyers accounted for 40 percent
of the homes purchased in 1999. The homebuying process can be overwhelming,
but if you go into it prepared, your first purchase can be a good
experience. Here are some things to consider before making the
plunge.
Getting a mortgage -
Fear of being rejected for a home loan is one of the main concerns
for first-time homebuyers. To lessen the stress, you may want to
get pre-approved for a loan before looking at prospective homes.
This will not only help you feel more confident, it will also give
you an advantage when there are multiple offers for a specific
home. The fact that your loan has already been approved is of great
value to the seller: because it shortens the purchase process and
there is less of a chance that the buyer will back out of the sale.
Mortgage Payments -
The costs involved in the purchase of a home can be overwhelming
to first-time buyers. However, with the help of a real estate professional,
you can calculate out how much they you be able to pay each month
in mortgage payments, and from there, what prospective homes offer
a feasible payment plan.
Down-Payment - The
down-payment amount varies depending on the value of the home you
choose and your mortgage lender. And in some cases, first-time
home buyers can purchase a home with no money down. Although it
varies from state to state, most offer government-funded programs
for first-time buyers that help people buy a home with no down-payment.
Your real estate professional will be able to explain the different
options available to you.
Closing Costs - First-time
buyers often forget to consider the closing costs when making an
offer on a home. Paying closing fees of up to 10 percent of the
home sale amount is not unusual. Add that to the down-payment and
you’ll have quite a sum to raise before the final papers
can be signed. However, a smart first-time buyer takes this into
account before making an offer, and with some professional help,
the costs can be estimated in advance.
Making offers - Don’t
feel pressured into making an offer on the first home you see.
This is a common mistake of many first-time homebuyers. Make sure
you view different homes to get a feel for the marketplace. When
you do decide on a home to make a bid on, work with your real estate
professional to get all of your questions answered first before
making an offer. But don’t wait too long to make an offer.
The longer you wait, the greater the chance other prospective buyers
may place offers, making it harder for you to negotiate a good
deal.
Condition of the Home -
Buying a “problem” home is another fear of first-timers.
A home that needs major repairs can become a costly venture. And,
unless the asking price is adjusted to reflect the hidden repairs
needed, chances are the home is not worth as much as the seller
is asking for it. To avoid unfortunate surprises, your real estate
professional may advise you to hire a home inspector before making
a serious offer. That way, you know what you are getting into.
Above all, remember that there are
no silly questions. Make sure you understand and are comfortable
with every aspect of the transaction. Your real estate professional
can be an invaluable asset in helping you make educated decisions
so that your first-home purchase is a rewarding experience.
