Buying your first home can be intimidating, but it doesn’t need to be. Understanding every step of the process and planning ahead to avoid potential setbacks can help ensure a successful experience.
Are your finances in order? Are you aware of closing and insurance costs, as well as property taxes? Do you understand escrow? Do you know how much real estate you can afford to buy?
Making the transition to first-time homeownership may seem daunting as you learn new terms, provide proper documentation for financing and find out how many pieces need to fall into place for the home purchase to be approved and completed. While it’s easy to turn to the internet for answers, some issues will not be easily resolved with an online search.
In its 2018 Profile of Home Buyers and Sellers, the National Association of REALTORS® (NAR) reported that first-time buyers made up 34 percent of all home buyers, about the same percentage as the past couple of years. In addition, 87 percent of buyers purchased their home through a real estate agent.
If you are considering purchasing your first home, here are a few points to keep in mind throughout the process:
- It is important to understand the financial aspects involved in buying a home. For example, you need to set a realistic budget for an affordable mortgage payment. Compile all the necessary financial documents, save up for a down payment and improve your credit if it is not already rated very good to excellent. According to the NAR’s 2018 Profile of Home Buyers and Sellers, 88 percent of all buyers financed their homes. Of those, the majority paid 10 percent of the price as a down payment and financed the remaining 90 percent. If you don’t know where to start, a mortgage advisor can help.
- Consider all the costs involved in buying and owning a home, including principal and interest on the loan, taxes, insurance and inspection costs. Also remember to think about future costs like utilities, maintenance, commuting, HOA fees and possible upgrades.
- If you do not understand a term or do not know what to do next, always consult an expert. An experienced real estate professional can help you find a property, negotiate the deal and guide you through every step of the home buying process.
To learn more about how to start planning for your first home purchase, contact a Coldwell Banker Residential Brokerage independent agent today.