The state of the real estate market over the last two years has created numerous challenges for first-time homebuyers. With rising home prices, low inventory, and now rising interest rates shoppers are facing unprecedented challenges.
Our real estate agents believe navigating the complexities of the current market is not impossible; however, to be successful, you need to start planning ahead of time. With some preparation, patience, and a good real estate agent, you can still easily land the home of your dreams. Here are our best tips for first-time homebuyers:
- Save, Save, And Save
First-time homebuyers are often caught off guard by the various expenses associated with closing on a home. The first and most important is the down payment. Depending on your type of home loan, you may be required to put down anywhere from 3.5% to 20%. The more you put down, the more home equity you'll earn and the lower your monthly payments.
Buyers are also on the hook for closing costs, including various mortgage fees and tile fees and usually add up to another 3% to 6% of the purchase price. You may also be required to pre-pay insurance premiums, interest, or property taxes.
Don't forget to also save for unexpected home maintenance costs.
Bottom line — you're going to need to start saving as early as you can.
- Check Your Credit
Your credit score plays a huge role in your ability to secure a mortgage, and it also influences the mortgage rate you're eligible to receive. You can request your credit score from one of the three large Equifax, TransUnion, or Experian, or there are various apps and services that provide free credit scores. You want to make sure your credit score is in good shape before starting house hunting.
- Get Preapproved
A preapproval letter from a lender signals to sellers that you're serious about home shopping and your lender has done a high-level assessment has been done on your financial situation. Preapprovals often require you to provide W2s, paystubs, and bank statements. Your lender will also look at your credit report. If everything checks out, they'll issue a letter stating you'll be pre-approved up to a certain amount. Once you obtain your letter, you can then begin touring some of these amazing Grand Haven homes for sale.
- Define Your Location
Location is always one of the very most important factors to consider. Make sure to pay attention to the neighborhood. What are the average home prices? Is it walkable? How is the school district? Remember that the quality of your neighborhood and your location will be very important when it comes to resale value. If you're trying to find the right location, don't forget to check out some of these Hudsonville homes for sale.
- Don't Forget The Inspection Contingency
As a first-time homebuyer, your home inspection contingency is an important protection. It gives you the ability to walk away from a deal or renegotiate without losing your earnest money if the home inspection uncovers something unfavorable.
Remember, you can't possibly uncover every issue with a home during a quick tour. The home inspection gives you the opportunity to do a thorough visual examination of the property with a professional. While some buyers waive the home inspection contingency to sweeten the offer, this generally isn't recommended for first-time homebuyers.
Buying your first home can be a stressful process, but by doing your research and finding the right agent, the process can be a lot easier. Contact us today for more tips!