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26
First-time Home Buyers Guide: Buying Your First Home in 2018
Your home purchase will probably be the biggest financial transaction you'll ever make. You'll need time, effort, financial backing, and a plan to help make it a reality. It's not an easy process, but you can work through it one step at a time.
Our REALTORS® have worked with many first-time home buyers. When you're ready, we'll provide the professional guidance you need. In the meantime, we've outlined the important steps for first-time home buyers to take in 2018.
Decide what kind of home you want
You must decide what type of home will meet your needs now and in the future and how much you can afford. Whether you want a country cottage, an in-town condo, or a suburban home with room to grow, your choice will set the tone your home-buying process.
Figure out the cost of buying a home
A 20% down payment and monthly mortgage payments are the obvious buyer's costs. To evaluate the true price of buying your home, consider these additional expenses.
- Closing costs: When you close on your new home, you may pay homeowners insurance premiums, title search fees, title insurance, inspection costs, loan origination fees, escrow fees and more. These and other closing costs can add 2 percent or more to your loan.
- Taxes: Property taxes assessed by your county government are usually included in your monthly mortgage payment.
- Insurance premiums: Your mortgage company will want proof of homeowners insurance at closing.
- Moving costs: You'll pay to move your belongings to your new home.
Determine the cost of living in a home
Your new home will be more expensive to operate than an apartment.
- Home maintenance and upkeep: Estimate the costs of general home maintenance, yard maintenance, home repairs, AC and heating systems maintenance.
- Higher utility costs: You'll have more appliances, more rooms to heat and cool, and higher utility bills. You'll also pay for water, sewage, and waste removal.
- Home furnishings: You'll have to buy more furniture and home accessories to furnish your additional rooms.
- Transportation: If you move to the suburbs, your daily commuter costs will increase.
Manage Your credit
Before you contact a mortgage company, get your credit in order. A higher rating may give you better mortgage terms.
- Review your credit reports: Visit annualcreditreport.com for free reports. Visit the Consumer Financial Protection Bureau for tips on what to look for.
- Correct any problems: If your reports reveal credit problems, work with debtors and credit bureaus to dispute or resolve them.
- Pay down your debt: Paying off existing debt increases your credit standing.
Search for mortgage options
You will choose your mortgage based on loan term, interest rate type, or loan type. CFPB Loan Options explains these options in detail and shows how they may affect you long-term.
You may qualify for mortgage assistance through Federal Housing Authority or Veterans Administration buying programs. Also, check state agencies for First Time Buyer programs that may give you a break on your down payment and interest rates.
Get mortgage pre-approval
To pre-approve you as a viable mortgage candidate, the mortgage company must review your credit reports, assets, bank information, income verification, and debts. With pre-approval, sellers and realtors see you as a serious buyer with the financial backing to close a deal.
Preparation is the key to a successful home buying process. Contact us when you're ready to start the search for your first home.
Note: a subscription to the Do Not Call list does not apply when requesting information from our company.
