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Important Tips to Remember When You’re Buying a New Home

Brady Webb
August 22, 2024

Being a first-time home buyer involves many different emotional stages. While it’s certainly thrilling to buy the home of your dreams, it’s integral to still keep your wits about you to guarantee you make good choices. Making the right decisions from the start assures you that the home buying process will be a breeze.

Here are some tips you’ll need to remember if you’re a first-time homebuyer or if your knowledge on tackling real estate requires a little refreshing:

Establish a Realistic Budget

Before you can start looking at any potential houses, you first need to determine a budget. It should be one you’re willing to invest in for your future property without putting your other financial responsibilities on the line.

Knowing how much you can offer will help you make practical choices and give you an idea of what kinds of houses you can aim to buy without struggle. A budget can also help you set realistic expectations for the upcoming process of home buying.

Evaluate Your Credit Score and Financial Health

Your credit score plays a significant role in the home-buying process. Mortgage lenders rely on it to assess your ability to repay a loan. A higher credit score typically means better interest rates, which can save you a significant amount of money in the long run. Before you begin the house-hunting process, it’s wise to check your credit score to see where you stand.

If your score is lower than desired, consider taking steps to improve it before applying for a mortgage. This could include paying down existing debts, correcting any errors on your credit report, and ensuring that all bills are paid on time. Even small improvements can have a noticeable effect on the rates and terms you receive from lenders.

Hire a Professional Real Estate Agent

The first thing you should do when you’re planning to buy a home is to hire a real estate agent. Having a professional who knows everything about the real estate market will make the entire process simpler and even more enjoyable for you.

When you’re talking about the home you want to buy, it’s vital to go over as many details with them as possible, especially the features of the house you’d like to prioritize. Understanding what you want will help them pick out better options that are more likely to suit your taste.

Understand All of the Costs Involved in Buying a Home

When planning your budget, it’s essential to consider all the costs that come with buying a home. While many first-time buyers focus on the down payment and the mortgage itself, there are additional expenses that you should be prepared for. These include:

Closing Costs: Typically ranging from 2% to 5% of the home’s purchase price, closing costs include fees for things like title searches, inspections, and loan processing.
Property Taxes and Homeowner’s Insurance: These ongoing costs can add up, so it’s important to factor them into your budget.
Home Maintenance and Repairs: Owning a home means responsibility for repairs, both small and large. Having an emergency fund for unexpected repairs is crucial.
Homeowners Association (HOA) Fees: If you’re purchasing a home in a community governed by an HOA, you may be required to pay monthly or annual fees to cover communal amenities and services.

While these costs might seem overwhelming at first, having a solid understanding of the full financial picture will help you avoid surprises down the road.

Shop Around for the Best Mortgage Rate

When it comes to securing a mortgage, don’t settle for the first lender you find. Interest rates can vary significantly from one lender to another, and even a small difference in rates can save you thousands of dollars over the life of the loan.

Consider working with multiple mortgage lenders or brokers to find the best deal for your financial situation. Make sure you understand the terms of the loan, including the interest rate, the length of the loan, and any fees involved. Be sure to inquire about both fixed-rate and adjustable-rate mortgages to find the option that best suits your needs.

Have Your Mortgage Broker Assess You for a Preapproval

The preapproval process is fundamental in home buying. A mortgage broker will determine how much money you can borrow for real estate by looking at your income, assets, and credit score. They can also assist you by connecting you to reliable mortgage lenders.

Other ways you can get loans are through the FHA, USDA, or VA. The FHA loan is insured by the Federal Housing Administration and can only be issued by an FHA-approved lender. The USDA loan is sponsored by the Department of Agriculture and is meant for those buying a home in rural and suburban areas. Meanwhile, the VA loan is a popular choice for veterans as it has zero down payment requirements.

Visit the Property You’re Interested in Buying

When you’ve finally found a property you’re interested in, it’s important to visit it and see it up close and in person. It’s even advisable to do this more than once to ensure you’re sure about your decision. While viewing pictures and videos is good for giving you a first impression, nothing will do a home more justice than seeing your future home.

A physical visit will also allow you to inspect the property for yourself, and you can determine whether everything is up to par with your expectations. You’ll also know if the property might need any renovations or other changes that will cost you more money down the line.

Get a Home Inspection

One of the most crucial steps in the home-buying process is getting a professional home inspection. While the property may look perfect on the surface, there could be hidden issues that aren’t immediately visible. A home inspector will assess the condition of the home and identify any potential problems, such as structural issues, plumbing problems, electrical malfunctions, or mold concerns.

A thorough inspection gives you a clearer idea of what you’re getting into, and can even provide leverage in negotiations with the seller. If significant issues are discovered, you may be able to ask the seller to fix them before you proceed with the purchase, or request a price reduction to cover the cost of repairs.

Make an Offer

After completing all the home buying procedures and feeling satisfied with the property, it’s essential to make an offer to secure your purchase of the home.

Usually, you’ll be signing a purchase agreement, which contains information on how much the property is, the price of the down payment, deadlines, and other loan details. Your real estate agent should make this process a breeze for you.

Your Mortgage Expert in Kentucky, Florida and beyond

Home buying is a simple procedure when you employ the correct services and rely on the right people. These professionals work to guide you to make the best decision that fits your budget and home requirements. When you make careful choices, you can rest assured you can fully bask in the feeling of finally purchasing your dream home.

American Mortgage Solutions is a mortgage company in Louisville, KY, serving Kentucky, Florida, Tennessee, Indiana, and Colorado. We offer different kinds of services, including a first-time home buyer loan. Get in touch with our mortgage lenders in Louisville, KY and surrounding areas. You can give us a call at (502) 327-9770 or, if in Florida, please call (239) 766-8344 to learn more about our services and apply for a loan!

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