Tips for First Time Home Buyers

Purchasing your first home is for many, a daunting task.
Don’t fall into the common mistakes many first time homebuyers make. Here are some tips to do it the right way:

Purchase a Home That is Just Right for Your Budget

Experts recommend your mortgage payment be no more than 28% of your income. While this is good, general advice it is important to find a home that specifically fits your overall financial objective. 

Obviously, it is detrimental both financially and emotionally to buy a house you can’t afford. You could struggle to meet your monthly payments, give up funding other important financial goals (such as retirement), or worse yet, you could face foreclosure.

However, it’s also inefficient to buy a house that is too inexpensive for you. If you are in a situation where you or your spouse will make considerably more money in the very near future, go ahead and purchase a slightly more expensive home. With realtor, moving, and closing costs, you do not want to purchase one home, only to upgrade to another a year later.

Consider Additional Homeowner Fees

Hidden homeowner’s costs. They are everywhere, and must be taken into consideration. Don’t make the mistakes of underestimating the costs associated with owning a home.

Some neighborhoods charge a homeowner’s association fee. Often times the fee doesn’t include lawn care or trash pick up...those things are additional... along with heating and cooling, gas and electric, water, cable, phone, and internet.

Depending on how much of a down payment you put on your new home, you might also be paying private mortgage insurance, or PMI. PMI is an insurance policy many lenders require the borrower to have, if the value to loan ratio of the home is less than 80%.  Again, this can significantly increase your monthly mortgage costs.

Establish a Partnership with Your Agent and Lender

For a first time home buyer, I highly recommend you work with a qualified real estate agent and good mortgage lender. You need people you can trust to work in your best interest.
You don’t have to go with the first Realtor or lender you meet. Find one that fits your style, and that you feel comfortable with.
A good place to start is asking friends and family for referrals. If they had a good experience with a member of their team, there’s a good chance you will too.
But don’t try to go at it alone—at least not the first time.

Buying your first house is an exciting and emotional time. Follow these tips and you are well on your way home. Good luck!

This site is not a broker and does not collect or solicit mortgage applications. Content is for informational or comparison purposes only. Services are not available in New York. Products and services may not be available in all other states.