REAL ESTATE 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 . Mortgage rates and tax limits .
Unfortunately , not all news is good news for first-time buyers . Mortgage rates are predicted to continue to rise in
2018 , expected to reach 5 percent toward the latter half of the year . In addition , new tax laws that went into effect at the beginning of the year have new limitations . Be sure to look into mortgage interest deduction and other tax deduction limits that may affect your taxes for 2018 .
3 . 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 .
4 . 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 nonnegotiables in your back pocket , but 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 .
5 . 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 .
6 . 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 .
7 . Moving .
You ’ ve done it ! You ’ ve purchased your first home . Now that you have a mortgage to pay , keep in mind some moneysaving 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 !
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