First-Time Home Buyer
With rising mortgage rates and scarce inventory, a little prior knowledge can save costly blunders. Here are a few tips below that can help first-time homebuyers have a smoother first encounter.
1. Interview Agents and Lenders First
Your real estate agent and lender choices will and do affect your
homebuying experience. Your choice of representation can affect your budget and stress levels. Before you sign anything, your agent should always show their experience and discuss your needs and goals. Before signing a contract, you’re not obligated to work with them.
Also, your relationship with your lender may not be as personal, but you’ll still want to vet them. Interview real estate agents and lenders to determine compatibility. Your realty agent should be thorough, familiar with your target location, and professional. Once you’re under contract, you’re legally obligated to your real estate agent and lender, so switching can be difficult, time-consuming, and expensive.
I have the experience and I am also a local to North East Tennessee which helps me give the most dedication to all my clients. You can feel confident I will help make your buying experience a great one.
2. Be flexible when House-Hunting
Search with an open mind; it’s easier than altering
expectations later. First-time buyers rarely obtain their first choice.
Flexibility boosts success. Before starting your search, rank the features you want most to assist you in evaluating your alternatives.
3. Understand Your Real Estate Deal
Real estate contracts are dry and extensive, but not binding
until signed. Offer parameters are negotiable. Ask for clarification if
something is unclear. If any portion doesn’t meet your needs, you can request changes before submitting the contract to the seller. When in doubt, you can always consult your real estate agent.
Contingency elections define what inspections and discussions can be done and when, such as routine home inspections, pest inspections, mortgage eligibility, and more
4. A Home Inspection Isn’t Always Complete
Homebuyers have a certain time period after contract signing to get a home inspection. Your real estate agent (or lawyer, depending on the state) can negotiate monetary concessions or contract repairs based on the inspection results. Especially for older homes, a full inspection report might be intimidating. No home is perfect, but most issues are fixable. If you don’t like something, you can bargain or walk away within the contingency period.
Also, inspectors aren’t perfect and they can’t look behind walls. They won’t be accountable for assessment errors or omissions. In a hot market, where properties sell quickly and competition is high, you may feel pressured to skip an inspection. Bring a building and systems expert if you’re considering this. It may reveal the home’s condition and red flags.
5. You Don’t Always Need 20% for a Down Payment
Traditional 20% down payment benefits include cheaper monthly mortgage payments and exemption from private mortgage insurance. First-time homebuyers often believe they need 20% down to buy a property, but this isn’t always the case. Plus, a lesser down payment can help you save for unexpected costs.
Mortgage insurance isn’t always expensive. PMI costs 0.5% to 1.5% of your mortgage total annually, or $125 per month on a $300,000 mortgage. If you have good credit, this rate may be negligible. Once your equity reaches 20%, you can typically cancel PMI depending on the type of loan you have.
Waiting for a larger down payment is also risky. If home price hikes surpass your savings rates and other inflation, you may be hurting yourself by waiting. Mortgage rates are rising even if home values remain flat. This trend is predicted to continue as the Fed raises interest rates through 2022 to combat excessive inflation.
6. No One-Size-Fits-All Financing
There are also customized loan products for different types of mortgage applicants. FHA loans offer smaller down payments and can accept low credit scores. Service members and veterans can get VA loans with no down payment and other incentives. Never overspend, though. What you’re comfortable spending upfront and monthly is more essential than what you’re preapproved for.
Reach out to me today and lets find your dream home!