First Time Home Buyers
First-Time Home Buyers Guide
When buying your first home, you may wish to avoid using the services of a Realtor®—given two common misconceptions:
- Hiring one will cost you more money than it’s worth
- You’ll be able to negotiate a better deal by dealing directly with the seller
The reality is buying your first home without the advice of an experienced Realtor® can be a costly mistake. One you will certainly not want to make again.
Negotiating directly with the seller, or a selling agent, does not allow you the advantage of having someone in your corner with the knowledge and experience gained from closing successful negotiations.
Realtor’s® are free to the buyer, so you definitely should be represented!
Are You Ready to Buy a Home?
Each year, millions of Americans consider buying their first home or buying another home. When the interest rates are low, it makes this transaction much more affordable.
Start Saving Now
If you’re planning to buy a home, you need to start saving your money and have enough for a down payment and closing costs. It’s never too early to start savings. The down payment can range from 3% to 20% of the price or the value of the house, but your mortgage agent will be able to help you with the best deal for you.
Don’t have a mortgage agent or bank? All you have to do is ask us. With our experience as an Orlando property management company, we can assist, as well as recommend, the top banks in Orlando to work with.
Closing costs normally run around 3.5% of the purchase price. You will receive a preliminary HUD, which will be an estimate of the costs before closing. In some situations, your Realtor® will be able to negotiate that some of the closing costs are paid for by the seller!
Do Your Research
When you start your search for your first home, you and your Realtor® will need to do some research. You’ll need to speak with a mortgage agent first. They will be able to provide you with a pre-approval letter for the amount you qualify. You can then determine the amount you are willing to spend on a home based on the monthly payments.
Have Credit Score in Good Standing
Look at your credit report before you fill out an application. Check for any errors and get them corrected. Errors on your credit report can mean an increased rate of interest on your mortgage loan.
If you have any other credit problems, you should try to get them resolved before you make an application for a loan. Low credit scores can be the cause for denial of a loan.
When you are ready to buy, work out a realistic budget that includes
- Mortgage payment
- Homeowners insurance
- Property taxes
- Home maintenance
Look for an Experienced Realtor®
The right person will help you get the right home and the right mortgage. Find out if your realtor knows of reputable home inspectors and what lenders he or she works with.
When you talk to your Realtor®, there will be terms used in real estate that you may not know the meaning of. Ask questions. Take notes. Make sure you understand the process.
Shopping for Your New Home
First-Time Home Buyer in Orlando, Florida?
It’s easy to fall in love with all the houses you see. Developments featuring new homes have them perfectly decorated, and they are clean and smell new. Older homes are clean, and though they may not be decorated to your taste, they can be enticing.
Take a “Good” Look Around the Home
Usually the first room you see will be the living room. As you walk through the house, think about your own furniture and how it will fit. Some homes are built so that furniture will only fit a certain way.
You want to make sure you can place your furniture and accessories so that the room is comfortable for you and your family. You don’t want to have to place the sofa in a way that everyone keeps bumping into it. Or, position the television at a weird angle so not everyone can view what’s streaming. Also, make sure your furniture can fit through the door when you move in.
Make Sure There Is “Room”
Be sure there is enough room for you and your possessions. If you don’t have a family, you may want to think about having space for additional household members.
You also want to ensure you can put your things away or display them in the manner you want. If you buy a small house that does not have the space you need, it will be cluttered in a year or two, and you’ll feel anxious, not relaxed, when you’re home. And isn’t that the whole point?
Consider Any “Extras” on Your Wish List
Can you afford a home with a swimming pool and/or a hot tub? Remember, you’ll need to budget extra costs for maintenance.
- Where do you want to live?
- Are you looking for acreage?
- Is there a particular school district you have in mind?
It’s important that you decide on the location of your home. This will also have an impact on the cost of your home. Living in the city can be expensive, depending on the neighborhood. Living in the suburbs or country can also be costly, depending on the acreage of the property and the cost to commute to work.
Carefully consider the items you want most in a home. You should include the cost of any extras in your budget. Make a list of these items and share them with your real estate agent/broker. You don’t want to rush into buying a home without careful consideration of your needs.
If you take the time, you will end up with the home of your dreams.
First-Time Home Buying Tips
The process of buying a home, especially for a first-time buyer, can be overwhelming. If you take the time to research real estate basics, it will prove to be a simple process.
Working with a good Realtor® will also make the process easier for you.
Establish a budget before your start looking at homes:
- Determine how much you are qualified to spend.
- Do you want to spend that amount for a monthly mortgage payment?
- How much can you afford as a down payment?
- Do you have enough money to cover the 3.5% of closing costs?
If you’re interested in an Adjustable Rate Mortgage (ARM), you should look for the best one available. With a good ARM, your interest rate and monthly payment will adjust at the same time. This should ensure that your interest rate does not affect your monthly payment. However, if the interest rate does affect your payment, it will be reflected in the overall amount of your loan balance.
You should try to get pre-approved for your mortgage loan. If several people are looking at the same house, you’ll have an advantage. A pre-qualification letter is required when making an offer. You will also know whether it is feasible for you to purchase a house. This will save you time and heartache if you find out later that you will not be approved for a loan.