What Every First Time Home Buyer Needs to Know
Here’s what every first-time home buyer needs to know to dive into house hunting with confidence. Whether it’s getting a mortgage, choosing a real estate agent, shopping for a home, or making a down payment, here are the “need-to-knows” for first time home buyers.
- What can you afford
Real Estate in Fairfield County is expensive. Chances are you’ll need a mortgage and a down payment. But, what price home can you really afford? That depends on your income, your credit score, and other variables. In general, experts recommend that your monthly house payment (which includes mortgage, maintenance costs, and taxes) should not exceed 28% of your gross monthly income. For example, if your before-tax monthly income is $6,000, multiply that by 0.28 and you’ll find that your recommended house payment should not exceed $1,680 a month (6000 x 0.28 = 1680).
Online mortgage calculators can provide a ballpark number, but for more accurate information, request a mortgage pre-approval from a lender. This allows the lender to assess your credit history, credit score, and other factors, and tell you whether you qualify for a loan, and for how much. Mortgage pre-approval also puts home sellers at ease; it assures them you have access to a loan to back up your offer.
- Pick the right Real Estate Agent
Buying a home is not quite as easy as buying most other things. You buy most things yourself; after sifting through a few online reviews. But a home? It’s not quite so easy. Buying a home requires a formal contract, a building inspection, the transfer of a deed, a title search, title insurance, homeowner’s insurance, applying for a mortgage (usually) and plenty of other paperwork. And, there’s the home itself. It may look great, but what if there’s a termite problem inside those walls or a nuclear waste plant being built down the block? And there’s also a whole lot of money involved.
So, before you put down that down payment, you’ll want to have a trusted real estate agent by your side to explain the ins and outs of the market. Be sure to find an agent familiar with the area where you’re planning to purchase. He/she will have a better idea of proper expectations and realistic prices.
- There is no such thing as a perfect home
It’s your first home; you may have dreamed about your ideal house and don’t want to settle for anything less. But real estate is all about compromise. As a general rule, most buyers prioritize three main things: price, size, and location. But realistically, you may only be able to achieve two of those three things. You may get a great deal on a huge house, but it’s not be in the best neighborhood. Or you may find the right-size house in a great neighborhood, but the down payment is higher than you were hoping to pay. Or you may find a home in the right neighborhood at the right price, but it’s a bit cozier that you anticipated.
Such trade-offs are par for the course. “Perfect” can be the enemy of “good,” or even “great.” Look to find something you can live with, grow into, and/or renovate to your taste.
- Do your homework
Once you find a home you love and your offer is accepted, you may be eager to move in. But don’t be hasty. Don’t purchase a home or make any payments without doing your due diligence. Hire an experienced attorney who can create a contract that protects your interests and includes all necessary contingencies to insure you have the right to get out of the deal if something goes wrong.
The most common contract contingencies are: (1) a home inspection, which allows you to request a resolution of issues (e.g., a faulty septic system or leaky roof) found by a professional inspector, and (2) a financing contingency, which gives you the right to get out of the deal if the lender doesn’t approve your loan. Source: Jamie Wiebe
An experienced attorney can insure you’re buying what you think you’re buying and protect you against unexpected and unwelcome costs and expenses at closing and afterward. My expertise can help you achieve the best results for you and your family. For more information please contact me at: 203-544-9945 or Beth@eedwardslaw.com.
