Think credit. Poor credit will make you a higher risk in the lenders’ eyes. Higher risk means your loan will be at a higher interest rate and your monthly payments will be higher. Manage your credit wisely. Make a point of paying your bills on time. Don’t apply for credit you don’t need. Don’t max out your credit cards. Pay down your debts. Even if your past credit was poor, establish that you are now paying your obligations on time. Plan now to clean up your credit before applying for a loan. Good credit is essential for first time home buyers. For more information on credit, read How Can I Improve My Credit Score?
Arrange financing. Look into financing as soon as possible. Get pre-approved before you start looking for a house. This lets you know what price range of houses to look at and identifies you as a serious buyer to a home seller.
Financial options. Consider FHA, VA, and state-backed special programs that require little down and have liberal qualification standards. Look for gifts and grants. There are community groups and non-profit organizations that have financing programs for first time home buyers.
Consider taxes. Home mortgage interest and property taxes are tax deductible. This means that while your monthly housing costs may be higher than when renting, what you save in taxes may make up some or all of the difference. Consult a tax professional on this.
Choose the proper location. Look at your needs, the needs of household members, and your preferences in terms of commuting, shopping, schools, recreation, and other factors that are important to you.
Home inspections. Plan on getting a home inspection on any offer you make. A professional inspection will help you understand the current condition of the property and the repair bills you are likely to face in the future.
Floor plan. Don’t overlook an inferior floor plan for an attractive exterior. You need a livable home. Determine how the house will function for your family.
Do your homework. Knowledge is power. Do not enter the market unprepared. Take your time and ask as many questions as you like. I have the experience and knowledge to help you make the right decisions.
Don’t try to make a shrewd investment. Buy based on your family needs. Don’t try to guess what will happen in the market.
Real estate agents. Agents are at the center of most property transactions. It is important that you know what the agent does, who they represent, and how the brokerage system works. Most agents will work for buyers free of charge. This is a really good deal for first time home buyers. The home sellers’ agent generally pays the fee of the buyers’ agent. Learn the advantages of working with an agent.
Delay large purchases. A new auto loan will hamper your ability to qualify for a home loan. You may need new furniture and appliances for your new home, but buy them after your house purchase closes. Avoid increasing any credit card debt.
Start now. Don’t waste your rent payment. If you can afford a home and you don’t make that purchase, you will lose the benefit of tax deductions, building home equity and the appreciation of your property. This is a big decision. Being a first time home buyer is challenging, but millions of people do it each year…..and you can too.
Don’t be overwhelmed. Buying your first house is exciting and scary at the same time. These are normal feelings that everyone has. Home ownership is one of the pillars of our society and one of the soundest economic decisions you will ever make. You’re making a good decision. Move forward.
First time home buyer tip: If you have any questions about Tigard real estate, give me a call. You will get straight answers with no sales pressure.
Wayne B. Pruner, GRI 503-891-0795 email: email@example.com