7 Tips from a recent first time home buyer
Still renting or living with family? I too, was on the fence about a year ago. I had many hesitations as a first time home buyer, even as someone who works in the industry! I was worried my credit wouldn’t be good enough, that I wouldn’t have enough money for the downpayment, or that rates would be too high for me to afford any home! Six months later, I purchased my first home. Here are the 7 things that I recommend for any of you sitting on the fence about buying.
Always pay on time
Credit cards, utility bills, rent, cell phones, and other payments can be super hard to manage. Each one seems to come out on a different day, with different payments, at a different rate. Make yourself a schedule of what to pay when. Put it in your phone, email, day planner, send yourself a text, anything to help you stay up to date. Keep in mind any missed payment is a ding on your credit, so even if you pay late, pay it as soon as you can. Don’t let something as simple as forgetting a payment ding your credit score.
Check your credit
Have you checked your credit score recently? Honestly, I didn’t even know my credit score before getting ready to buy a house. I thought anything less than a 700 meant I was disqualified from the house buying game. Luckily, this is not the case! Most first time home buyer programs are only looking for a 620 or higher. And good news! Still having trouble building your credit? I did too. I was able to go through my credit union and take out a secured credit card that charges no interest! Why is that? Well, in some cases, when you take out a secured line of credit, you are actually taking your own money and borrowing it from yourself. This means that your funds are always kept in this account, and you only pay back what you borrow from yourself each month. This is a super easy tool for building your credit within months (mine went from a 500 to a 650 within 6 months!).
Talk with a LOCAL lender
I cannot stress this part enough. Talk with someone local, someone who you can see in person. Ask your friends about who they used, ask your coworkers, ask your parents, and especially ask your Realtor®. You want a lender who is skilled in working with first time home buyers, who understands your market, and who is up to date on the latest programs available to first time home buyers. I always defer back to my example of two young airmen I was working with about 3 years ago. One used a local lender, closed on time, and got a better deal on his loan. The other used an out of state lender who was not familiar with Wyoming and our markets, and as a result, his closing was delayed and he ended up getting a higher interest rate. Be careful when you are looking online for lenders, many will promise low interest rates and money down but cannot follow through on that promise when the time comes.‎
Know what your downpayment will be
And speaking of downpayments, do you know what yours might be as a first time home buyer? Most FHA programs start as low as 3.5% down. Which is great! However, if you are Wyoming first time home buyer, you might even be in better luck. WCDA is a program that is offered to most first time home buyers in Wyoming that meet certain criteria. This program can help you get your home for as low as $1500 down!
Be aware of your Debt to Income Ratio
Remember those car payments, credit cards, and other debt we touched on earlier? Make sure that you know what that looks like monthly so you have an idea of what your Debt to Income Ratio might look like. Most lenders like to keep it around 40%, so if you are looking at a lot of credit card or other debt, chances are that paying that down or off first will give you a heck of a lot more buying power.
Know your needs
Let’s get real for a second. Everyone wants their dream home. You know the one I’m talking about. With the extravagant bookcase, or the big 70 car garage, or the double staircase. Or whatever it is. We all have some sort of dream home in mind. But let’s get real for a minute. Your first house is probably not gonna be your dream home. It might not even be your 78th dream home. With that in mind, make a list of your needs instead. What is your current living situation giving you that you cannot live without? Mine was definitely a garage, I had lived with one at my rental in college, and after going back to living without one I knew one of my must haves was at least a 1 car garage. I spend a lot of my time baking as well, so I knew the kitchen needed to have at least a small pantry for me to store my baking supplies. Things I wasn’t looking for in my home but got anyway? A really great sized backyard, main floor everything, and a maintenance free exterior. Keep these things in mind when you start looking. Be willing to look past ugly colored paint and outdated fixtures to see the real bones of a house. My before and afters might be a little telling!
Check with your Realtor®‎
With the right information, and a great Realtor®‎, you can make your first home dream a reality. Right now, with low interest rates, it is the time to buy! If you are looking for a Realtor who is experienced with first time home buyers, you’ve definitely come to the right place! Call me and I can help you get set up in the world of buying your first (or dream!) home!
For more information, call Adri True with the True Team at RE/MAX! With a combined 23 years in real estate the True Team can help you find the property that is right for you! Call 307-287-7320 or 307-630-8290 or connect online at cheyennehomestore.com to schedule an appointment with us today!
