TOP TIPS FOR FIRST TIME HOME BUYERS
Lisa and Chip have collaborated in order to bring you advice if you are purchasing a home for the first time! Buying a home can be tricky, so that's why Lisa and Chip are here to help you through the real estate process!
Click here to watch their top tips!
1. Save up for your down payment.
2. Check on your credit.
3. Get pre-approved on a loan with a lender.
4. Pause all credit activity.
5. Get a buyer's agent.
6. Get an idea of the type of home you're looking for.
7. Don't sweat the small stuff while searching!
8. Be able to compromise.
9. Make a good offer.
10. After approval, get a home inspection
11. Enjoy your new home!
First Time Home Buyer Tips
Save up for your down payment.
Tired of renting? It's time to begin saving up for a down payment. Figuring out the right amount you should be saving for can be tricky! You will need to consider your monthly mortgage payment, your down-payment and also your closing costs.
The first thing you should do is consult a lender. Click here to talk to MTM's lender recommendation and contact one of our highly qualified agents.
Typically, you need to save at least 3-5% of the home's value. There are many factors that go into your down payment, so it is best to talk to the professionals who can discuss your personal situation with you.
Check on your credit.
In order to get approved for a loan, a lender will need to pull your credit. If you are considering purchasing a home, you'll need to know what your credit score is. The minimum FICO score for a typical FHA loan is 500 or higher. Lower scores typically mean higher down payments. This is something that your lender will be able to discuss with you.
Get pre-approved on a loan.
Pre-approval letters show sellers that you are a serious buyer! It gives you the “green light” to proceed in the home buying process. The lender you’re working with makes sure you have the adequate amount for a down payment and an income that will suffice for the mortgage payments. The lender also looks at the appraisal to ensure that the property’s value has sufficient collateral in relation to the loan amount.
Don’t know where to start? Talk to Courtney Coulter with Ruoff - a company we trust! The purchase of a new home for you and your family is one of the biggest decisions you’ll make, and it should be treated that way. Be sure you trust who you’re working with!
What will you need to get a mortgage pre-approval? Your lender will ask for the following documentations:
1. Information on your income. This includes everything from W-2s to pay stubs and tax returns from the past couple of years. You will need to include all additional sources of income including overtime, other jobs, bonuses, etc.
2. Identification. Be sure to bring a driver’s license or valid form of identification. Along with that, you will be required to provide your social security number!
3. Information on any assets. Aside from your income, you will need to provide additional assets such as any investments, bank statements, gift money, etc. Questions on what should be included should go to your lender.
Pause all credit activity.
Changes in your credit activity can increase the longevity of the mortgage process. Keep it simple - pause activity! It can be exciting, and you may be tempted to start shopping for furniture, appliances, and other household items. Before making those decisions, consider waiting until you close on your mortgage. After you get pre-approved for your loan, here are some things to avoid in order to keep your pre-approval letter valid:
1. Don’t change your jobs. Income changes can invalidate your pre-approval process. Career changes can influence the amount of money you can borrow.
2. Keep track of any large deposits. When you deposit a large chunk of money, it needs to be traced back to its origin. Unclear deposits need an explanation to your loan officer!
3. Don’t miss out on your payments! Keep up with your bills and pay them on time. One of the top factors that go into your credit score is your payment history.
4. Don’t apply for any new credit. Your credit score can be pulled up again and again throughout the process, and any changes can either slow down the deal or terminate it altogether.
5. Avoid large purchases. Putting a dent in your savings by purchasing high ticket items will alter your debt-to-income ratio or credit utilization. Before purchasing larger items, typically, you will want to wait until after you close on your mortgage.
Get a buyer’s agent.
Having an agent alleviate the bulk of your stress is essential in having a smooth home buying transaction. A buyer’s agent differs from a seller’s agent and a listing agent. A buyer’s agent provides you with access to homes you’re actually interested in! They have access to the real estate market tools to navigate exactly what you’re looking for. Oftentimes, a buyer’s agent will save you money and time so you don’t have a stressful experience. Your buyer’s agent will typically be at your disposal to answer any questions or concerns you may have throughout the process.You can use a buyer’s agent at no cost to you! How does that work? The seller pays the commission for both the seller’s and buyer’s agent with the commission at closing. Here is some of the things that a buyer’s agent can do for you during this important process:
1. Find the perfect home for you. After gathering your information such as how much you’re pre-approved for, what you’d like in a home, your ideal location, and so on, your agent will arrange for showings. A showing is a set time between the buyer and seller to tour the home. Your agent may also inform you of any future open houses you may be interested in. Knowing the market in your area is important and is something that a buyer’s agent will be able to explain to you in order to help you make informed decisions.
2. Advocating for you. As a buyer’s agent, they are legally obligated to represent the best interest of their buyer. When looking for a home, they truly look out for you.
3. Qualified Recommendations. Not only can they make recommendations on home purchase decisions, but they can also make recommendations to other professionals you’ll need during this process. Your buyer’s agent knows the best people in the area to be in contact with from mortgage brokers to home inspectors and movers. Ask your MTM agent for recommendations today!
4. Negotiations. Your buyer’s agent will be able to advise you on offers in order to make a fair but potentially money-saving decision. Your agent will negotiate on your behalf with your best interest in mind. An agent with experience will be able to get you the best deal and help you avoid getting stuck with the home’s unwanted (and potentially expensive!) troubles.
5. Overcoming hurdles. No matter how experienced the agent is, unforeseen roadblocks are inevitable. Whether something comes up in the appraisal or home inspection- or if the deal fell through, your agent will know exactly how to advise you during this large, and sometimes emotional, purchase.
Call MTM Realty at 219-324-4640 for help or contact one of our highly qualified agents.
Research the type of home you want.
Figure out your top locations, number of bedrooms, and what amenities are a must to help you agent! This will help narrow the search for your needs! Determining the right home for you can be a tedious task. Make a list and work with your agent! Here are some things to consider:
- Location. Think about school zones, nearby shopping, and the neighborhood you’re in. If you may ever need to sell your home in the future, also think about the value the home may have in that location later on.
- Bedrooms. Do you want to grow a family? Do you want extra bedrooms for guests? Will you need an extra bedroom for other purposes? Consider these questions when determining the number of bedrooms you believe you will need.
- Garage. Think about the number of cars you have and if you need extra storage room for outdoor materials/ lawn mowers. Maybe you only need a two car garage and a shed. Maybe you need a 3 car garage and a large pole barn. If it needs to be attached to the home, that may be a requirement important to note. Discuss these options with your realtor!
- Square Footage. If you have a large family or some furry friends in your home, square footage may be important. Square footage considers all livable space, so this may include the basement and upstairs of the home as well.
- Type of home. There are many types of home-styles such as condos, apartments, townhouses, farm, and ranch- just to name a few. Consider how many levels the home has and what you’re comfortable with.
- Bathrooms. You may want to have a master bathroom, a bathroom for the kids, or a main-level bathroom. Consider the bedroom-bathroom ratio.
Consider your lifestyle when making note of homes you’re looking for. Being an avid golfer or horse rider may affect your property choices. New builds, open concepts, pools, basements, and waterfront properties are also key words to help your realtor find your dream home.
Be able to compromise.
It is important to be open-minded. As hard as you may search, no home will be perfect! Being able to distinguish what a need and want early on can help you down the line when you’re choosing a home. Here are some examples of ways you can compromise:
Problem: wanting a finished basement, but the home’s basement isn’t finished.
Compromise: finish the basement later on.
Problem: garage is too small.
Compromise: add on later to the home or build a pole barn in the back.
Problem: bright-colored wallpaper and mismatched carpet.
Compromise: change these details after the home is purchased.
It can be discouraging to not have exactly what you want in your home right away, but it can also be a fun project to look forward to later on. Putting together a list of goals for the home improvements and budgeting those out in a timeline can be a long-term rewarding venture. Purchasing a home that needs minor improvements can also add value to the home after those tasks are completed!
Make a good offer.
While staying in your budget, make a competitive offer. In a competitive market, it can be difficult to get the home you want in the price point you’re looking for. The expertise of your MTM Realty buyer’s agent will be able to guide you. Nervous about the competition? Here are some suggestions to help you stand out from the rest:
1. With your offer, submit your pre approval letter.
2. Trust your MTM Real Estate agent to be assertive.
3. Be friendly with your offer. Avoid requests for changes and be courteous of move-out time.
4. Leave a lasting impression with your best offer. Often, low offers may not be considered if there are multiple offers.
5. Put down a large earnest money deposit. This shows you are a serious buyer and willing to put your cash down.
6. Be light on any contingencies.
7. Be sure to mention if you can pay for a home will cash. This is appealing because it can help move things forward- faster!
8. Write a letter to the seller. If there are several offers, but yours has a handwritten letter describing your love for the home and your family’s story, you may stand out from the rest.
9. Offer to close fast.
10. Offer to waive certain closing costs.
Get a home inspection.
Home inspections allow the buyer to know of any major issues with the home before you close. It may cost a little extra, but it’s a small price to pay to know your home is safe. Your realtor will have great, local recommendations on who to use. Trusting your inspector will allow you to freely ask questions and have less stress knowing your future home is in good hands. Here are some important tips when working with a home inspector:
1. Before the home inspector arrives at the property, do your own pre-inspection. Note any possible concerns you may have to bring up when the inspector arrives.
2. Don’t be afraid to ask questions! Remember, you hired a home inspector to evaluate your future home.
3. If there are areas of the home that are hard to get to, ask the home inspector to take pictures for your reference. These areas may include an attic or crawl space.
4. Figure out when the roof has been replaced and if there are any warranties. Take a peek at the shingles and always check the ceilings on the inside of the property.
5. Test the plumbing and water pressure. Check bathtubs, sinks and showers.
6. Figure out how old the furnace and water heater are and if they need to be replaced soon.
Enjoy your new home.
You and your agent have worked hard to find the perfect home for you! Here are some moving tips just for you!. Ask your realtor about any additional things you may need to know! Now relax and enjoy!