Here is some advice for first-time buyers to ensure a smooth and stress-free experience in the housing market.
Chris D. Bentley shares the basics of purchasing a home for the first time, including how to acquire a mortgage, hire a real estate agent, start house hunting, and save for a down payment.
- They should consider how much they can afford as a first-time home buyer.
Because of the high price of real estate, most buyers will require a mortgage loan to cover the remaining balance, in addition to a sizable down payment. However, the issue of how much house they can afford remains. According to most experts, mortgage, upkeep, and taxes shouldn’t eat up more than 28% of a prospective homeowner’s take-home wage.
- They should pick a competent real estate agent.
You probably do most of your shopping, reading a handful of customer reviews before clicking the Buy button and handing over your credit card details. But a place to call home? Sadly, it’s not that simple. A deed transfer, title search, and other legal formalities are all part of the home-buying process. In addition, there’s the house itself; it could appeal to them at first glance, but what if there’s a problem with termites within the walls or a nuclear waste facility being constructed nearby? It’s not hard to locate a Realtor, but finding one who is a good fit for them and what they want to purchase is complex. Because of the substantial financial commitment required of a house purchase, they would also benefit from working with a trustworthy and dependable real estate agent.
- They should know there is no such thing as a perfect home.
In their minds, the first property they purchase will always be perfect, and they won’t accept anything less. We understand, having been there ourselves. Remember, however, that compromise is essential in the real estate business. Three factors often rank first on a buyer’s list: cost, square footage, and proximity to amenities. However, they should settle for accomplishing two out of the above-mentioned goals. A large home may be purchased at a discount but may not be in the safest area. Or they can discover a fantastic home in a desirable neighborhood, but the down payment is more than they had hoped. A property in the ideal location and price range could be a touch too.
- They should do their homework well.
After finding the perfect place and having an offer accepted, they could be itching to be moved in. But don’t rush things. They shouldn’t make a down payment or buy a house without completing their research and include certain “contingencies” in their contract that would allow them to back out if things went tragically wrong. Most sales agreements include a home inspection clause that gives the buyer the right to have any problems discovered by a professional inspector, such as a shaky foundation or a leaking roof, resolved before the sale is finalized.
- They should know what their credit option is
Although there is no longer a first-time buyer tax credit, there are still several tax benefits that new homeowners may not be aware of. The biggest is that the mortgage interest deduction is helpful for new mortgages, which often have high-interest rates. Discount points, basically prepaid interest, may also be deducted if the buyer prepays some or all of their interest when they take out your mortgage. As an incentive for first-time homebuyers, several states and municipalities provide mortgage credit certification that may be used to claim a tax credit for a portion of the mortgage interest paid. They should inquire with their real estate agent and the appropriate municipal authorities about the availability of applicable tax credits.
