When you’re a new home buyer, there can be quite a bit to think about. Let’s look at a few pieces of information that will help inform you and make you ready to start your search.
Buying a primary residence is best for people who are planning to stay in it for at least a few years (three to five minimum). The reason for this is that the selling of real estate is costly. The longer you stay in the home, the better your chances of enjoying the financial benefits of home ownership.
The first step in the home buying process is not actually looking at homes. I know it seems like it would be, but you need to get your finances in order first. Since it is likely that you will need a mortgage, you will want to get that squared away first. This will also save you time by making sure you’re actually looking in the right price range when you actually do go out shopping. Ask your lender for a pre-approval based on your income, debt and credit.
You will want to make sure you have a look at your credit report months before you are ready to shop. If you take our advice and get your pre-approval ahead of time, you can do this when you sit down with your lender, who can pull your credit for you. Then, if there are any corrections that need to be made, you have time to do so before you’re ready to actually buy.
Be sure to tell your lender how much you are able to afford each month. A lender can give you a pre-approval amount based on your income, debt and credit, but this may not correlate with your actual comfort with regard to monthly payment. And the most important thing is that you can afford the amount for which you are going to be writing a check each month!
Don’t have 20% to put down? This may not be an issue at all. FHA loans only require 3.5% down, and VA loans don’t require any! Talk to your lender to see if either of these options are appropriate for you.
Find a good REALTOR to work with. There are so many hiccups that can happen during the course of an escrow, and having an experienced agent in your corner is invaluable. Plus, the seller pays your agent’s commission!
Once you fall in love with a home, put on the brakes and do some homework. Actually, your agent will do most of this, including pulling comparable sales, talking to the listing agent to see if there are other competing offers and any big disclosures as to the condition of the home. All of these aspects need to be taken into account when coming up with an offer strategy.
Inspect the home! Although you will receive a pile of paperwork full of seller disclosures, it is imperative that you hire your own inspector to give you an unbiased opinion as to the condition of the home. If the inspector uncovers any big-ticket repair items, it may be appropriate to ask the seller to make repairs or reduce the price. Your agent will help you with this.
Please check out these resources on Downtown San Diego Real Estate and the First Time Home Buyer.