Summer season brings out more and more potential home buyers for various reasons including families who wish to settle into a new home before the school year starts, or due to a relocation, or just because summer is a better time to move than in the midst of winter.
Some buyers may be first time home buyers, satisfying the American dream of homeownership. While many rush into buying a home, excited at the prospect, it’s wise to slow down and consider what you should know as a first time home buyer. These apply whether you are building or purchasing an existing home.
For example, you should check your credit. An inaccurate credit report or low credit score may affect your financing, and it takes two months for the credit score to improve after you’ve corrected a mistake or paid down on an account. Order a report at least three months in advance of applying for a home loan. Through the Fair Credit Reporting Act, you are entitled to receive a free copy of your credit report once a year.
Here are some other things first time home buyers should keep in mind….
Get preapproved: Contact your lender for a preapproval letter. The lender will require you to apply for a loan, and the letter shows the lender has confirmed what type of loan you qualify for, and that they are agreeing to process the loan.
Truly understand what you can afford: Base this on what you earn now, not what you expect to earn at any point in the future, even if a big job offer or a promotion are in the works.
Understand what you have to pay for: While renting requires a flat monthly cost, a mortgage payment includes homeowner’s insurance, property taxes, and sometimes homeowner’s association fees or private mortgage insurance (PMI). Understand these costs because they can raise your monthly payment by hundreds of dollars.
Have a wish list, but don’t expect perfection: There is no perfect home, whether you are purchasing an existing home or building from scratch. Your budget may determine how much you have to compromise on your wish list, but even if you have “all the money in the world” you still won’t get every single thing you would like to have in a home. Start a wish list with this in mind, and decide what you are willing to give up, and what items are absolutes, yet remain flexible.
Invest in an up and coming area: A home is an investment, and one of the best ways to save money yet benefit in the long run is to build or buy a home in an area less developed that is poised to become a hot spot. Your realtor or builder may be able to offer advice on such areas, or you may have to do some research of your own.
Thing long-term: Are you planning to stay in the house long-term, or care for your aging relatives. If so, you’ll want to consider how the home will suit your needs for all life stages. One of the services J. Thompson Builders provides is accessible living building, including home plans, which allow you to stay in your home for much longer as you age, or as you begin to move in and care for your elderly relatives.