First-Time Home Buyer Should Know

First time home buying is a very exciting experience for everyone. You could not ignore the feeling of enthusiasm and eagerness. On the other hand, you will also feel a bit worried since purchasing a house involves a huge amount of money. Therefore, it is necessary to put into consideration everything before you decide. Especialy if you are a first time home buyer, there are a lot of things to consider.

Following are some essential facts you need to consider as a first-time homebuyer:


1. When buying a house, normally you have to apply for a loan and have it financed. You must have a stable job since this is a long-term obligation. You must have a job that allows you to survive mortgage payments until the end of the contract. Banks will screen your financial status and the main criterion is a regular income.

2. When the bank gives approval, make sure to bring a prequalification letter to the real estate broker when you being searching for a potential home. The letter will tell you how much loan you can avail. This will also ensure the agent that you have the capacity to purchase a house. This prequalification will help determine the market value of the house you can afford to buy based on your current financial standing.

3. Learn about the first-time homebuyer stimulus. This bill provides credit of up to $8,000 for those who qualify and purchase before Dec. 1, 2009. This can help make your American dream of owning a home into reality. Consult a professional tax adviser for further details on how to benefit from this tax credit.

4. Make a calculation of what you can afford for a home. This is also based on the down payment you have to make and the amount you are allowed to borrow. You can make an estimate by using an affordability or loan calculator on the Internet. However, it is still preferable to consult a financial adviser to determine the exact amount you can afford.

5. Since you have an idea already of the amount you can afford, the moment you found a house, you ca make an offer for it. Normally, you offer less than the price of the house. If you go to places where there is a stiff competition for the same properties, you have to offer a full price or even go higher than the full amount. When a seller or homeowner accepts your offer, the bank will have someone appraise the house. When this is through, the loan proceedings will follow and a closing date is set for signing documents.

6. Think about where you prefer to live. It is your choice to stay in your current neighborhood or you want to start fresh in a different locality. Whatever you choose, make a thorough research of the demographics of that area, consider the distance form your work, and make a research on good schools nearby for your kids.

7. Make a thorough inspection of the house you wish to acquire. You can hire a professional home inspector to guarantee that the property is of good quality. A home inspector's fee is normally at $300. Although this may appear costly, but this is, necessary if you want to be assured that the home you purchase will not give you headaches later on.

8. Don't forget to set aside money for closings costs. It is typically 1 to 2 percent of the purchase price. This goes towards the land transfer tax and lawyer fees.

Remember, real estate never sleeps. If you intend to buy a hot property, you have to make move quickly or lose it.

By Sonia

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