Buying With Confidence: What Every First-Time Homebuyer Should Know
When you go out to buy your first home, it’s what you don’t know that could hurt you the most and could end up costing you your dream house. The key is being prepared, understanding the proper steps to take and setting the right expectations.
“Being prepared is going to make buying your first home a much more pleasant experience,” said Beverly Orloski, a Mortgage Consultant for PeoplesBank. “It will also make it an effective one as well.”
Following these five steps can help you get going, get organized and potentially save you a lot of money.
- Determine Your Number: The amount you can afford to spend is largely dictated by the amount you can put down. You ideally want a 20% cash deposit; however, there are programs and loans available if that isn’t an option for you. You might want to meet with a lender to determine the amount you qualify for and are comfortable spending. Many lenders offer free prequalification services that include a free credit report.
- Define Your Area: Don’t look just anywhere. Try to compare local taxes, school district ratings and nearby amenities to help you narrow your search to a few ideal neighborhoods.
- Make Your Lists: Make two lists—one with your absolute needs, the other with ideal nice-to-haves. Do your best to stick to the lists.
- Form Your Offer Strategy: Once you’ve found a house you like, work with your real estate agent to determine your initial offer. Remember to give yourself room to negotiate.
- Get Organized: If your offer is accepted you have to be ready to move quickly, because you typically only have 40-45 days to get your mortgage approved. Your lender will help you determine what paperwork you will need so that your mortgage process is as smooth as possible.
“Once you understand the process, it’s all about assembling the right team around you,” said Orloski. “From brokers to lawyers to lenders, working with people who know what they’re doing and who you trust will help you put yourself in a position to make a strong offer and close quickly.”