IN Brentwood-Baldwin-Whitehall Summer 2019 | Page 42

WHAT FIRST-TIME
HOMEBUYERS
SHOULD KNOW
Last year was a great year for new homebuyers. According
to the National Association of Realtors, about 35 percent of
the homebuying market was made up of first-time buyers. Yet,
each year is not created equally in the mortgage industry and
real estate market. Changes happen frequently and it is often
hard to keep up. If you’re looking to break into real estate for
the first time, here are some insights into how to navigate
the market.
Saving. Step number one for a first-time homebuyer
should always be saving. Take a look at your current finances.
It’s recommended that your mortgage payment not exceed
30 percent of your gross monthly income. See where you
can cut back spending to put away a little extra out of your
paycheck every month for your new home. Not only can this
cash go toward a down payment, but most likely you’ll need
furniture, appliances, and decorations to furnish your new
home. Don’t just calculate the amount of money needed for a
down payment. Keep in mind the unforeseen expenses such
as home repairs, agent fees and closing costs. You can never
save too much!
1. Mortgage. Applying for a mortgage can be an intimidating
process, but if you prepare accordingly, you’ll be happy with
the outcome. According to LendingTree.com, mortgage
lenders are allowing higher debt levels for borrowers
with lower down payments (as little as 3 percent on a
conventional mortgage loan). You may not need the typical
20 percent down that was required of homebuyers a few
decades ago. If your debt-to-income ratio is high, you may
not have to worry. Mortgage companies are making it easier
for borrowers with more debt to still qualify.
2. Agent. Having a real estate agent in your corner for a first-
time purchase is key. Agents will not only help you navigate
the home-buying process, but can also be a valuable
resource for an inside look at new homes that go on the
market. This gives buyers the opportunity to view homes
that may not have made it onto real estate websites for
public viewing.
3. Location. Your dream house may not be in your dream
location, and your dream location may not have your
dream house. Don’t get stuck in a rut if you’re not seeing
everything you want in your price range. Typically, you’ll
need to make some compromises with your first home.
Keep a few non-negotiables in your back pocket, but
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otherwise be open to the idea of putting some of your
own upgrades and changes into a home that may not have
everything on your wish list.
4. Home. Don’t get stuck in the mindset that you should spend
every dollar that you qualify for in your mortgage. This could
lead to bigger problems down the road. Look in the market
under your max budget and be creative when looking at
homes for ways to make improvements or changes that
better fit your needs. A little bit of sweat equity can go a
long way and will give the home your own personal touch.
5. Offer. Once you’ve found a house you want to call “home,”
work with your real estate agent to come up with an offer
the seller can’t refuse. Whether the house needs some
improvements or it’s a hot buy on the market, your agent
can guide you into making a serious offer to the seller.
If you’re feeling passionate about the home, write the
seller a letter explaining why you’re the best buyer for the
home. These touches can sometimes be the difference
between getting the house of your dreams, or losing it to
another buyer.
6. Moving. You’ve done it! You’ve purchased your first home.
Now that you have a mortgage to pay, keep in mind some
money-saving tips, like asking your closest family and
friends to help you move! A little pizza can go a long way
when looking for some extra help. Make a plan for those
personal touches to add to your home. Test out paint colors
in each room to make sure you like the color in the daylight.
Purchase furniture after making detailed measurements
(you don’t want to come home with something that doesn’t
fit!). Add some curb appeal as a finishing touch and as a way
to meet your new neighbors!