Congratulations, first time home buyers--This is an exciting time for you! Perhaps you need down payment assistance or you’ve saved your money for a down payment and now you’re ready to make your first home purchase. I am sure you have heard it again and again, but it is true "buying a home instead of renting a home is so much better financially" plus you get a tax write off! But it is also the first step to building your net worth.
There’s a lot to do-- so, before you buy the mansion of your dreams that you can’t afford, let’s consider the following:
- Find the Right Real Estate Agent. Sounds a bit self-serving but it’s not. I want you to work with a real estate agent that is going to best serve you and your needs. Someone who listens, who knows the market, who works full time in the industry. Someone that has your best interest at heart, not their pocket book. Someone that will work hard for you and make your goals theirs.
- Check Your Credit. You can pull your credit reports for free once a year from each of the three credit reporting agencies. I recommend pulling one report from annualcreditreport.com every few months in the year before you plan to buy. Monitor your credit monthly using creditkarma.com – it’s free. If there are discrepancies, get them fixed before we get you pre-qualified for a loan.
- Loan Pre-Qualification. Understanding how much you have for a down payment is as important as how much you can spend for the purchase. Working together, we will get you pre-qualified for a mortgage. This also means giving the lender all the documentation they need to be able to say you are a solid buyer- there are no unknown issues that can come up.
- Establish the right credit. If you’re building (or rebuilding) credit to purchase a home, consider the credit builder account at BMO Harris Bank. It is a CD that you make payments on and the bank reports the payments to credit agencies. At the end of the payments, the money plus interest is yours. You’re boosting your credit while creating savings for yourself.
- Set Realistic Goals. I don’t want you to be in harm’s way financially because you’ve purchased a home the lender says you qualify for, but in reality will not be able to go on a vacation, save for college or retirement—basically one you can’t afford. On your first home purchase, you will more than likely get some of the features you want in a home while others will have to wait for your next home. It’s better to be able to afford your payments than be drowning in debt in your dream home. Best idea is to write a list of non- negotiable features and then list items it would be nice if the home had those items. Makes narrowing down just the right home so much easier!
- Understand the market- Markets change, sometimes within months. So, make sure you understand the trends happening in the zip code you are looking in and the community you are interested in…worst thing that can happen is you fall in love with a home but make a not so competitive offer and the seller accepts another offer. BUMMER!! Everyone wants a home for the lowest price possible, but some time you can negotiate other points of the contact not just the price.
- Location. Whether you’re a first time or seasoned home buyer, it is important to think about where you spend your time. Where do you work? Where do your family and friends live or spend time? Don’t pick a home in South Scottsdale because it’s a cool neighborhood if you spend all your time in the West Valley. It might seem like a good idea today, but the commute will begin to wear on you eventually.
Your first home purchase is a big investment in your future. Contact me today to set up a time to meet and go over the process of buying a home, answer all your questions and let’s see if we’re a good fit for your first home purchase, I’d love to chat with you!!