SPECIAL SECTION:
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.
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Real Estate
7. BUYING/SELLING:
Get a second opinion.
When you have lived in your home for years, it’s easy to
overlook problems that potential buyers may spot right away.
Have a relative or trusted friend come over to spot any small
fixes that you can make prior to putting your home on the
market to make sure it’s in optimal condition prior to selling.
When considering buying a home, it’s also helpful to have
someone who is not buying the home go with you to take a
look. He/she will be able to point out potential issues that you
may not see when trying to make such an important decision.
8. SELLING:
Ignore the housing market.
Don’t waste your time watching the housing market for
the best time to sell. According to Investopedia, “it doesn’t
matter what your home is worth at any given moment except
the moment when you sell it. Being able to choose when you
sell your home, rather than being forced to sell it due to job
relocation or financial distress, will be the biggest determinant
of whether you will see a solid profit from your investment.”
9. SELLING:
Will renovating always increase my resale value?
Make conscious decisions when renovating your home.
While newer will entice potential buyers, be cognizant of what
rooms you update and how you do it. While updated kitchens
will increase the value of your home, be sure to appeal to a wide
range of tastes. A good place to start is with the appliances.
Realtor.com states that homes with stainless steel appliances sell
15 percent faster than those without. Updated bathrooms are
easier to satisfy a wider range of buyers’ desires for luxury, but
be sure to keep the colors neutral.
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