7 Things First-time Homebuyers Should Know
With the increases in wages and job stability, more and more people are ready to take the plunge and buy. Purchasing a home is one of the biggest transactions in a person's life. It affects the way that you'll live for years, if not decades.
By knowing more about the market that you are moving into and having tips for buying your first home, you can hopefully locate a property that you will love and buy a home that will last a lifetime.
To understand your financial options and how they apply to your specific situation, speak with your lender and/or financial advisor.
1. There are Many Different Types of Homes Available
Builders have listened to what the new generation of buyers wants. Observing the success of the tiny home phenomenon and increasing desires to live near urban centers, they are creating more homes that fit these sorts of lifestyles. Instead of being limited to single family homes, you have your pick of townhouses and other types of properties that fit your lifestyle best.
Become familiar with the different types of homes available; single-family, condominium, townhome, and duplex, to name just a few.
2. Mortgages are Becoming Easier to Obtain
Lenders were skittish in the wake of the 2008 crisis, making it difficult for many people to qualify for a loan. However, many lenders have since relaxed and are now offering loans to a wider range of individuals. There are also more options for low down-payment mortgages, which means you may not need to have as much cash-on-hand as you once thought you might have needed.
3. Interest Rates are Going Up
Chances are, you will probably be paying a higher interest rates than a similar buyer would have in the past. On the power of a strengthening economy, the Federal Reserve has raised interest rates for only the second time since the 2008 financial crisis. With rising interest rates, be sure and lock-in your interest rate with your lender to protect from interest rate increase before your home closes. Higher interest rates affect how much you will pay over the entire length of your loan; fractions of a percentage point can turn into thousands of dollars over a span of 30 years.
4. There Will be More Competition for Homes
Over half of all homebuyers in 2017 are expected to be first time buyers. Since these buyers are often going for smaller starter homes, they will likely be in competition with one another. When buying a home, you should never feel pressured to make an offer if you aren't ready. Haste now can lead to regret later. However, to increase your chances of finding the home you want, you will need to be resolute. Work with your real estate agent on how best to make offers in a tight market.
Decide right away what factors are winners with you and which ones are deal breakers. If you absolutely do not want the maintenance and ongoing costs of a home with a swimming pool, for instance, do not feel pulled toward a really cute, well-situated house that has one. Instead, focus your search on the houses that best fit your personal and specific requirements.
5. Purchase a Home That Meets Your Budget and Size Requirements
If you have been approved for a mortgage that is larger than what you expected, you are not obligated to buy for that maximum amount. Remember that buying a more expensive house can mean spending more throughout the length of your loan. Additionally, consider a homes on-going costs; such as utilities, property taxes and maintenance.
6. Home Sellers May Not Give Closing Costs Assistance
With many people competing for the homes that are currently available, it is becoming more difficult for a home seller to assist with closing costs closing. Instead of asking for closing cost assistance. Look to the homes actual price or request certain items in the home, such as lawnmowers, garden equipment and the washer/dryer, be sold with the home. Many people are either looking to replace certain appliances when moving to a new home, and others are looking to pare down if they are planning on moving to a far away city or state in some cases. This will decrease the amount of money you will need to spend for thes items after moving into your first home.
7. Programs That Help First Time Buyers Continue to be Valuable
If you are having trouble pulling together a sizeable down payment, the government has several programs to assist buyers. For example, if you qualify, FHA loans only require a down payment of 3.5% of the value of the home. On a $125,000 house, that's just $4375. Though there may be other closing costs due at closing in addition to the actual downpayment.
Buying a home for the first time is one of the most exciting events of a person's life. By making good decisions now, you are building the foundation for years of security and and the chance to begin building wealth. Look at the important factors that affect buyers, both the current and ongoing ones. Make decisions wisely based on what you really want from a home. By following these important rules, you will increase your chances of finding the right home for you and for your future.
