What Do I Need To Do As A First Time Home Buyer?

    Congratulations, you’ve decided to buy a house!

    This is an exciting time in your life but it can also feel stressful. Asking friends and family for their insights can help you feel prepared for the home-buying process. Also, consider these questions to help yourself be ready for your home buying search!

    Do you have a budget for mortgage payments and other housing costs?

    Recent laws prevent lenders from making home loans that exceed thirty-five percent of your monthly income. The generally accepted rule of thumb is to not exceed twenty-eight percent of your gross monthly income, according to Forbes. To figure out what that looks like for your circumstances, set up a budget that includes housing costs as a line item, along with other monthly bills and regular living expenses. You’ll also want to factor in things like homeowners insurance and home maintenance costs.

    Have you considered other potential costs?

    As a homeowner, you’ll be responsible for managing more than just a mortgage payment. Things like fixing leaky pipes, damaged gutters, winterizing and lawn care are just a few home maintenance items homeowners have to make time for in their schedules to either maintain themselves or to call a professional to repair. This may influence what type of home you look to buy. Can you live with a fixer upper until you can save for a remodel or do you want something in move-in condition? Do you have the ability to make some repairs, or will you need to hire out basic maintenance?

    Have you saved enough for a down payment?

    You also need to figure out if you’ve saved enough for a down payment. If you’re unable to put twenty percent down toward the cost of your home, you may be responsible for private mortgage insurance (PMI) depending on your type of mortgage. PMI adds dollars to your payment and must be considered when setting your budget.

    Have you thought about wants and needs?

    Wants and needs related to home ownership can vary from person to person and even in couples. Make a list including a variety of things that are important to you and your family, from the number of bathrooms and size of yard, to the commute to your current job, school options and the stability of the neighborhood. Be sure when you consider these bigger items, you also look at access to daily amenities such as grocery stores, shopping centers, parks and movie theaters.

    What paperwork should I gather?

    If you’re ready to buy a home, you’ll need specific documents pulled together to complete the mortgage approval process. Those may include several years of tax returns and pay stubs, and it’s best to have that information lined up ahead of time. In addition, you’ll want to review your credit score and talk to a lender about getting pre-approved. Call a RE/MAX Capitol Properties Realtor for a recommendation on a lender if you don’t have anyone you already know, life and trust.

    Do you need a real estate agent?

    Homes can be listed in different ways by sellers, the most common being with a real estate agent or for sale by owner. Most buyers work with a real estate agent to help find the right home and facilitate this negotiation, handle the contract deadlines and details and guide them through the entire process. Connect with a RE/MAX Capitol Properties agent today to interview him or her to make sure it is a good fit. Set the expectations for both of you up front.

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