Purchasing a property for the first time can be daunting. There are so many steps, requirements and tasks to follow that you may be worried about making a costly mistake. One bonus of being a first-time buyer is that you will have access to incentives which were created to encourage first time buyers into the real estate market. Here are some of the things you need to think about before you purchase a property and what to expect from the process itself:
The Advantages of Being a First-Time Buyer
Purchasing a home is still high up on most people’s wish lists. As a first time buyer you have access to tax breaks, state programs, and federally backed loans if you don’t have enough money to make the minimum down payment.
According to the Department of Housing and Urban Development, a first-time homebuyer is a person who meets one of the following conditions:
- A single parent who hasn’t owned a property on their own in the past.
- A person who hasn’t owned a property in the last 3 years.
- A displaced homeowner who has previously owned a property with a partner.
- A person who hasn’t owned a permanent residence.
- A person who has only purchased a property that didn’t meet state or local codes.
Things to Think About Before Purchasing a Property
The first thing you need to do is work out what your long term goals are and check to make sure that owning your own home fits in with these goals. Here are some of the main things you should think about before purchasing a property:
- Can you afford it? – You need to have enough money to pay for the house purchase and any ongoing expenses you will have.
- Look at your spending – You need to find out how much money you spend every month and what it’s being spent on.
- Check your credit – If you want to successfully apply for a mortgage, then you’ll need a good credit record.
- What home is right for you? – You need to decide what style and size home is suitable for you. You could save on the purchase price by choosing a property which needs renovating but remember that you’ll have to spend time, money and energy completing the work on the property.
- Can you get a mortgage? – Before looking for a property you should find out how much lenders are willing to lend you. You will need to have a pre-approved loan before placing an offer on a property.
The Buying Process
Now you know what you can afford it’s time to learn about the home-buying process itself. Here’s what you can expect:
- Find a property – Real-estate agents will help you find a property that you love and is in your budget. You could also look at online listings and drive around neighborhoods to see what you can find.
- Secure finance – When searching for a mortgage don’t feel like you have to go to your current provider. Getting advice from a mortgage broker is a brilliant way to find the best mortgages.
- Contact a title company – Title companies like Bay Title Company do a lot of the hard work for you when it comes to purchasing a property. They run checks on the property to make sure the title is legitimate and legal. They find out about the history of the property and will advise you on whether it has any known problems. Title companies handle all of the documentation for you which makes the home buying process much easier.
- Make an offer – The seller will either accept, decline or issue a counteroffer. Make sure you check your budget before increasing your offer. When you’ve reached an agreement with the seller, you’ll pay a deposit into escrow. The seller will then take the house off the market.
- Close the purchase – If you’ve come to a deal with the seller and you’ve completed all the relevant inspections, then it’s time to sign the paperwork and pay the remaining money.
Buying your first home can be daunting. There’s so much to think about from the laws and regulations to safety and money. Make sure you follow the steps above and you’ll be well on your way to owning your first home.