First Time Home Buyer Specialists
Buying Your First Home
Buying a home is probably the biggest investment you will make in your lifetime. You need to consider several things when you considering buying a home.
Where do you want to live? How much can you borrow and how much should you borrow? Should you buy a new home or an existing home? What are your financing options? All of these questions can be made easier if you have a real estate agent helping you.
Finding a real estate agent is your first step to buying a home. All agents go to a real estate school and are required to pass a state and federal real estate test in order to obtain their real estate license. Our agents specialize as a buyer’s agent or as a seller’s agent so that you can feel secure knowing that your agent works only for you and has your interests at stake. You want a professional to help you through the maze of paperwork and to help you find the house that you want. Our agents have the experience, both in a seller’s market as well as in a buyer’s market.
Generally, agents are paid from the seller’s side of the deal. When a house is put up for sale, the seller and their agent agree to a percentage of the selling price to be split between the seller’s agent and buyer’s agent. The buyer usually is not involved in determining how much their agent gets paid.
Where do you want to live? This will be limited to what you can afford to buy, but it is a good place to begin. Become familiar with different neighborhoods. If you have children, you might want to consider a neighborhood close to schools and parks. Perhaps you like to go out to eat, or to the movies, or you enjoy being downtown close to shopping—living in the vicinity of all these activities might be preferable. Living close to where you work or close to mass transit is another option to consider.
How much can you borrow and how much should you borrow? Your credit, your existing debt, your current employment status, and how much money you have to put down on a home determines how much you can borrow and what type of financing your qualify for. What is your monthly payment going to be? Does that include taxes and insurance? You might qualify for a larger amount of money than you need to, or should, borrow. Once you find a lender or a mortgage broker, they can tell you how much you can borrow, and what types of mortgages are available.
If you know how much you want to borrow, you should have enough money saved to use as a deposit—the amount of your deposit can help to determine the interest rate you may qualify for, so the higher deposit, the lower the interest rate on the money you borrow. As a rule of thumb, most lenders are comfortable with the deposit money being 5% of the amount you want to borrow. Ten percent is even better.
If you have less than 5% in deposit money, the lender may demand that you purchase an insurance policy that protects the lender in case you default on your loan. This can be quite expensive and it usually is in place until you have repaid a high percentage of your loan.
Is your credit damaged? Are you self-employed? Have you moved recently? There are other options besides mortgage brokers to use in financing a purchase of a home.
