Buying your first home can be an exciting and nerve-wracking experience. To avoid common mistakes and make the homebuying process go as smoothly as possible, consider these tips for first-time homebuyers.
Get your finances in order
Your first home will likely be the largest purchase you’ve ever made up to that point. As such, it’s important to be financially stable before entering this new stage of your life. Before buying your home, make sure you have a realistic plan for paying for it. Because getting your finances in order can take time, try to give yourself at least a year to carry out this plan. During this period, focus on boosting your credit score, paying off your existing debts, and building an emergency fund.
Get pre-approved for a loan
When buying your first home, you’ll probably have to take out a loan to help pay for your mortgage. While many loans require that you have a good credit score, hard money loans and secured loans can be good alternatives if you don’t. Whatever option you choose, you should aim to get pre-approved for the loan before going house-hunting. In addition to giving you a better idea of which houses are within your budget, pre-approval can help you land the home of your dreams instead of losing the deal to a better-prepared buyer.
Shop within your budget
Before falling in love with a house you can’t afford, make sure to establish your price range. When determining your budget, make sure to account for monthly housing costs, property and homeowner’s taxes, and unexpected expenses such as structural or plumbing issues. You don’t want to move into your dream home only to realize that you can’t afford to stay. After you’ve solidified your budget, only shop for houses that you can afford. Going a little over budget may not seem like a big deal when it comes to finding the perfect house, but doing so is extremely risky. It puts you at risk of losing the home if your finances take a turn for the worse.
Don’t be afraid to negotiate
While you might be eager to do whatever it takes to lock down the home of your dreams, don’t be afraid to negotiate—especially if you’re in a buyer’s market where the realtor or owner may be eager to sell the home. When negotiating, consider asking for a homebuyer rebate or if the seller is willing to cover reparations costs for any major issues that come up in the inspection. Doing so can result in major savings.