Ten Common Sense Steps to Buying Your First Home

Buying a first home is probably one of the most important milestones you will reach in your life. It should be a time for celebration, after all there is no greater feeling than receiving the keys to your first home but the process can often be filled with fear and anxiety. Follow these ten steps to ensure that your home buying experience is the best one possible.

Save! Save! Save!

Choices that you make now may affect your ability to purchase a home later. Create a savings plan and stick to it! You should aim to save at least 10% of your weekly net pay but this will depend on how much you make, how high your expenses are, and how quickly you wish to purchase. The more money you have saved the less stress you are likely to encounter during the financing process. If necessary, open a savings account dedicated to your goal of purchasing a home.

Get Your Finances in Order

Your FICO credit score is used to determine your eligibility for a loan (among other things) and affects the interest rate you will pay over a given period of time. Even a 1% difference in interest rates can translate into thousands of dollars over the life of a loan. A minimum FICO score of 620 is recommended for FHA loans and many loan programs require even higher. So, with that said be sure to check your credit report and scores regularly from the three primary credit reporting agencies, Experian, Equifax, and Transunion. You can register to receive a free annual report from www.annualcreditreport.com) but you will not receive your score with that report. You can obtain your score from many online sites however be aware that almost all of these sites will charge you some type of fee for your score.

To determine what your potential interest rate may be at the time of purchase, check sites such as www.bankrate.com for current information and rates.

Plan

Make a list and check it twice! In the first tip we discussed the importance of saving. Planning is equally important. Once you have saved up and are ready to buy, plan ahead and make a list of things to do. You will most likely want to get pre-approved for a loan, search for a realtor, and research neighborhoods. Add all your tasks to the list and create a timeline that is realistic for you and your family. In addition, your family should discuss your requirements for the home you purchase. Do you need more than one bathroom? How many bedrooms are necessary? Do you want a home with property? Create a list of must haves and wants and be sure that the home meets your needs before deciding to purchase.

Find an Agent

Sure you can buy or sell a home without an agent but why pass up the years of expertise and numerous industry contacts?! You should make it a priority to find an experienced agent specifically if you are a first time home buyer (or seller). Agents can act on your behalf throughout the entire process. In many cases, the fee the agent receives is offset by the time and aggravation you have saved by using one. You can use one of the many online sites such as www.realtor.com to assist you with this process.

Where’s Waldo?!!

The process of finding your dream home can sometimes be a very daunting task, almost as if you are trying to locate a fictional character in a children’s book. The best way to find your dream home is…to get out and visit the homes. Become a master at open houses! Walk the home and get an idea of the home’s layout. Open closet and pantry doors, look at room size, and even walk the property (if applicable). Check out the neighborhood at different times of day and talk to the neighbors. Making a note of the pros and cons of each home will only help you with the decision process later. After all, it is up to you to decide if you want to make a particular place your permanent home.

Give Yourself Options

Be sure to look at several different homes before making your final decision. Make sure that the homes you are visiting have all the basics – including the number of bedrooms and bathrooms your family will require. Remember you will most likely be in this home for quite some time so be sure it is what you want and that it fits your needs.

Don’t Judge A Book by It’s Cover

Be open to different floor plans, paint schemes, etc. Remember if you don’t like the home’s décor, its ok, you can change it! The puce green color on the dining room walls can be updated very easily with a few coats of fresh paint. And along those same lines, do not fall in love with a home strictly because of the décor. When the owner sells the home and leaves so do the furnishings, artwork, and other decorative pieces. Unless of course you purchased that too!

Stop and Smell the Roses

Sounds cliché doesn’t it? But it’s true. Take your time whenever possible. Rushing through any process almost inevitably leads to mistakes and lost opportunities. Take the time to read through legal documents which require your signature. This is another instance in which a trusted real estate agent (mentioned in tip 4) may become invaluable to you. And be sure to give yourself time to make the best decision possible. There’s nothing worse than buyer’s remorse especially when you can’t return the item!

Just Keep Moving

As unfortunate as it is, the fact is, that you may lose out on a house to another buyer. Try not to dwell on the house that was lost and instead put your energy into finding another home. Remember, just as there are many fish in the sea, there are many homes in a town and you just may find one that you love even more than the first!

Don’t Stress!

You do not want to look back on this life event and remember all the tears and anger. Instead, think of buying a home as the beginning of a new chapter in your life. One that is exciting and fun! Take your time with the home buying process and involve the whole family in the decision!

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