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Five Lessons First-time Home Buyers Need to Learn!

Five Lessons First-time Home Buyers Need to Learn!

Talk to anyone who has ever bought a home and they’ll surely say, “I wish I would have known…” about some part of their home-purchasing process. From things buyers wish they would have looked for to people they wish they would have talked with, when it comes to making a major purchase like buying a home, you really cannot be armed with too much information.

If you’re a first-time homebuyer, instead of learning the hard way – after the fact – here are five home-buying lessons to brush up on before you make your big purchase:

1. Start Saving Money Right Away. This lesson is really for anyone who plans to buy a house… ever. It is never too early to start saving money to put toward your down payment. Otherwise, you may end up paying private mortgage insurance, or PMI, until 20% of your home’s purchase price is paid.

But, let’s not forget that your down payment is not the only thing you’ll need cash for when it comes to buying a home. There also are closing costs that you’ll pay up front. See why we advise that it is never too early to start saving money? If it sounds like a daunting task for you right now, start small. Even $100 each month will add up quickly!

2. Consider Other Living Expenses, Too. If this is your first home, you cannot forget to take into account the fact that you’ll probably be facing higher utility bills than when you were renting. You’ll also now be responsible for the costs that come along with routine home maintenance. Of course, there also will be renovation costs if there are any immediate changes that you would like to make to your new home.

The moral of this home-buying advice? You simply cannot only look at your projected monthly mortgage payment when you’re planning to buy your first home! Try to calculate things like utility bills, homeowner association fees and insurance fees. Try to estimate routine maintenance costs. If all of these calculations are starting to make you feel a bit squeamish about your monthly expenses, it may be time to look at less expensive homes that will be more affordable after all of these “extras” are added.  

3. Shop Around for a Mortgage. Some prospective home buyers already may have a preferred bank where they handle their financial business and that is a great place to start looking when it comes time to seek a mortgage. However, it is important to note that your own personal bank may not have the best mortgage rates on the market. Yes, they may; but, it cannot hurt to check with other lenders before settling for a rate.

Why? Another bank or credit union may be offering an APR that is even a fraction of a percentage point lower. While that may not seem like a big deal, it could save you thousands of dollars throughout the life of your mortgage. Do yourself a favor and shop around to make sure that you’re getting the best mortgage rate out there.

4. Don’t go it Alone. Once you’ve got your financial ducks in a row, it can be easy to get wrapped up in the romantic aspects of buying your first home… you know, touring through a few homes and imagining your new life once you’re all settled inside. Because you may be in love with the idea of finally becoming a homeowner, you may overlook certain issues in a home that you feel is “the one.” So, it is a good idea to involve a trusted family member or friend in your home-buying process – even if it is just to glance over your prospective property to make sure that you’re not being blind to an obvious problem before you buy.

This “don’t go-it-alone” advice is two-fold, too. Not only do you want to involve a trusted family member or friend in your home-buying process, but you also want to have a trusted real estate professional by your side as well. Your agent can offer you valuable market knowledge, the know-how to find homes that you may not have considered, but will most definitely love – and, much more! A great real estate professional will complete a comparative market analysis to make sure you’re paying a fair price for your home. They also will be your go-to when it comes to negotiating the right price. Who doesn’t want all of that help?!

5. Don’t Rush. Once you’ve decided that you’re ready to make your first home purchase, all of the excitement that goes along with the process can propel you into buying a home too quickly - a decision you may regret. Put the brakes on when it comes to this major purchase and simply try to enjoy the process.

Know what you’re looking for in a home, how much you can afford and where you may want to buy, so that you can share these details with an experienced real estate professional, who will help find the right home for you – at the right time! Once you’ve placed an offer, don’t rush through the closing process, either. True, with all of the inspections and appraisals, it can be arduous; but, the closing process will ensure that your new home is ready for you - and, that you’re ready for home ownership!

If you feel like these five lessons for first-time home buyers have given you the knowledge you need to start the home-buying process, we’re ready to help! Visit our First Time Home Buyers guide to learn even more.