Here are some tips to help prepare you for the home-buying season that especially relevant to first-time home buyers.
- Draw up a hard budget and stick to it.
Let’s say you're interested in a home, but you’re not sure it’s in your price range. That’s a problem. Before you start browsing, it’s crucial that you iron out important questions such as, what is the most you can afford? What is your ideal price range? To help you get started, use an online mortgage calculator to determine the maximum monthly payment you can afford based on the price of the home after you put down a down payment and over a 30-year-mortgage.
If you fall in love with a house but the monthly payment is more than you can afford, when including all your other fixed expenses, it’s time to move on.
You can also enlist the help of Charter Bank’s loan officer to help you arrive at a figure. One of our lenders will be able to tell you how much the bank will lend you and at what interest rate. While this figure doesn’t necessarily equal what you can afford to pay for a home, it will give you an idea of the most you are able to pay.
- Make a short list of your non-negotiables.
Before you start seriously shopping, consider your lifestyle and values. What features would enhance your well-being? And what would make you miserable? From there, make a list of non-negotiables -- from location, to square footage, to amenities -- that you must have in your future home. This will also help guide your realtor.
Once you start looking at houses with your must have and must-not have lists, reevaluate your list as you gain a better sense of what's out there that fits your preferences.
- Use an experienced realtor who knows the area and the market.
Your realtor can make or break your home buying experience. If you know where you want to live, try and get a realtor referral. Fifty four percent of buyers found their agent from a personal referral or had used an agent they’d worked with before, according to recent figures from the National Association of Realtors. So start by asking friends, family or friends of friends who live in your area of interest for recommendations.
An experienced realtor will also have contacts for other home buying services you might need such as a real-estate attorney -- and can offer tips going in, such as having a copy of a mortgage pre-approval letter on hand from the loaning bank, to show sellers you’re a serious buyer.
- Check out comparable apartments and houses in the area to get an idea of pricing.
First time home buyers should look at comparable homes in the area they want to live, according to Bankrate. By searching online, you can easily research what homes in the area you’re looking at have sold for recently.
If you’re looking in a particular apartment building or condo, get a sense of what other properties in the building or area have sold for or are being sold for. This will give you an idea for what your starting offer should be when you’re ready to bid on your future home.
- Ask about expected closing costs
Closing costs, which don’t include your personal packing and moving costs, can vary widely. Typically, they include the cost of hiring a real-estate attorney to look over your buyer-seller agreement and a home appraiser to evaluate the home before the sale, which is typically paid by the buyer.
With these tips and the help of one of our experienced lenders, we can help navigate you through the home buying experience.
Source: entrepreneur.com, Carolyn Sun is the research editor at Entrepreneur.com.