With summer coming to an end and the “back-to-school” season drawing near, we came up with a
lesson plan and back-to-basics tips for first-time homebuyers looking to make their first monumental purchase. Our First-Time Buyer 101 will guide you through purchasing your first home, whether you are preparing to buy one now or in six months. Check out the specific tips below for your buying timeframe and remember…it always pays to do your homework!
Six months prior to purchase:
• Check your credit score. Six months offers you an ample amount of time to improve your score, should it fall short of a desirable number.
• Assess your finances and find out what you can afford. A simple rule of thumb is that the house price should be 2.5 times your yearly salary or less.
• Determine the price range for your new house, factoring in how much of a down payment you will have; how much you can comfortably put toward your housing costs every month; and how much debt you can afford to pay off monthly. Fannie May recommends buyers spend no more than 28% of their total income on housing costs.
Five months prior to purchase:
• Get pre-approved for a loan. This will make your search more efficient, because you will know the exact price range for which you will be approved. It will also spare you the heartbreak if you find your dream home and then find out you won’t be approved.
Four months prior to purchase:
• Interview two or three real estate agents so you can be sure you are working with the agent who is the best fit for you. Meeting with several different agents will cost you nothing and you can feel confident you will be working with the agent who will be able to best advise you.
• Research the areas you are considering by downloading specific apps for homebuyers. These are excellent resources for insider neighborhood information including the location of the nearest local necessities (restaurants, hospitals, banks, etc.) or stats on local schools, public transportation options and more. Use HomeFinder.com’s “View Neighborhood” feature to explore schools, home price to rent ratio, community demographic info, real estate market info and more
• Once you find the neighborhood that will best suit your lifestyle, download the HomeFinder.com Real Estate Android™ app to help you speed up your on-the-go home search with its advanced GPS, easy-to-use map interface and auto-syncing capabilities.
Two to three months prior to purchase:
• Once you’ve found the home for you, factor in the additional fees you will incur after you close (taxes, assessments, insurance, repairs) so you know what the house will really cost per month. Budget accordingly!
One to two months prior to purchase:
• Devise an organization plan for packing and secure a moving company
• Notify the post office, schools, doctors, work, utilities, insurance, bank, etc. of your new address.
• If you have kids, look into the area’s upcoming league, lessons or activity schedules, to make their adjustment period easier.
We hope this First-Time Buyer 101 guide helps you as you embark on finding your new home! Contact HomeFinder.com, should you have any questions during your home search process.
Thank you for your article. I want to suggest that at the time when buyers are interviewing real estate agents, they should also talk to mortgage companies. As someone who faced a potential American Home Mortgage Servicing, Inc foreclosure, I learned the hard way that I didn’t estimate properly my ability to repay on my mortgage. I was lucky that AHMSI was able to work with me, and thus, prevent the foreclosure, but it would have been much better had I spoke with them prior to even looking for a home.
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