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
Continued on next page >
WEST COUNTY
❘
SUMMER 2018
27