Essential Tips for First-Time Homebuyers
A Few Tips for First-Time Homebuyers
For many, owning their own home is still a large part of achieving the American Dream. Unfortunately, achieving this goal can pose quite a few challenges to first-time homebuyers (more so now than ever before). Given the current housing market in Orlando, one can see why many have opted to continue renting for a few more years.
If you are ready to take those first steps towards homeownership, we’ve compiled a few tips from the experts that could help you secure the home of your dreams. Review these recommendations closely before beginning the house hunting process (or during), and it should go much smoother.
Pick a Housing Budget and Stick to It!
It’s incredible how many first-time buyers don’t have a handle on their own finances. You should know exactly how much money you can feasibly spend on a house. You don’t want to spend all that time identifying your dream home and then discover you can’t afford it.
Here’s our recommendation for calculating a feasible housing budget that will leave you with some breathing room:
- Figure out how much money you’re spending on a monthly basis.
- Identify which items you’re spending the majority of your available money on.
- Find out what your current savings are.
- Punch your numbers into a calculator like this one.
- Calculate the time you’d need to come up with the money to make a down payment.
(Fast Fact: Don’t get caught up on mortgage deductions or the after-tax consequences–focus on the true cost of making monthly principal, interest, taxes and insurance payments compared to your monthly salary.)
Compile a Realistic Wish List for Your First Home
You can come up with a feasible list of what you’d like to see in your first home based on your budget and desired location. Doing some extra background research can really come in handy during this step. You shouldn’t be spending more than you can afford here.
Get Pre-Approved for a Morgage
Here’s an area where many hopeful first-time homebuyers have been turned away– qualifying for a reasonable mortgage. You can plan ahead by getting pre-approved for your mortgage, and we strongly recommend it.
Here’s what you’ll need to do:
- Start shopping around for a good lender (check out at least three different types – brokers, national banks, etc.).
- Identify a group of strong candidates.
- Compare some of their available loans side-by-side to see which one works best.
- Pick the lender that best suites your needs.
(Quick Fact: A pre-approval is not valid for more than 3 months, so you might have to re-qualify with your lender after an allotted period of time.)
Work With a Good Home Inspector
Home inspectors can be just as useful to first-time buyers as a good real estate agent, if not more so because they can save you even more money down the road. You’ll want to comb the local Orlando market for quality referrals before you hire a home inspector. Also be sure to interview several candidates before making a final decision. Finding the right home inspector will make all the difference– read more about that here.
Don’t Blow Your Budget Closing on a Home
Please remember that the costs associated with homeownership can get much more extensive after you’ve closed on a property. Many first-time buyers get caught up thinking only about listed price of a home. There are many other things you’ll be responsible for once you own a home, including:
- Mortgage payments
- Property taxes
- Homeowner’s insurance
- Homeowner’s Association fees
- Maintenance costs can pile up over the years too.
Make Sure You Like the Neighborhood Before Making an Offer
Granted this comes down to personal preference, but we recommend taking the time to get to know the surrounding neighborhood. You’re making a long-term commitment, so be sure you can picture yourself happy in that area for at least a few years. You may do a great job at home upkeep, but your property value may take a dip if your neighborhood is in a state of disrepair. On the flip side, great neighbors can become a game changing resource for first-time homebuyers.
This list should show you that there is plenty to take into account when looking to buy your first home here in Orlando. These recommendations will help you avoid some major pitfalls, but don’t let yourself feel rushed during this process. You shouldn’t have to settle for a house that you aren’t sure about.