The home-buying process can be complicated. Your real estate agent and mortgage broker can help you establish some buying recommendations and guidelines and narrow down your home search. Here are some recommendations to help you find and buy your first home in today's market.
Be Prepared With a Down Payment
One of the first things you can do to get ready for the home-buying process is to save up a down payment for your purchase. The down payment will go toward the home's purchase and will reduce the amount you will need to borrow from a mortgage loan company. This can have long-lasting effects on the buying process and how much you will eventually pay over the life of the loan.
There are a lot of different loan programs, and some of them don't require very much on a down payment. For example, a 20 percent down payment has been a traditional amount to put toward a home purchase in decades past, but today you can find a loan requiring as low as three percent down. Some home loans have no down payment requirements, and you just need to talk to your mortgage broker about these options.
Keep in mind if that you don't have a large down payment of 20 percent or more, you will end up paying more interest on your loan funds, but you will also likely need to pay for mortgage insurance. Private mortgage insurance (PMI) is required on a loan when you are borrowing more than 80 percent of a property's value.
Select the Right Location
The location of the home you choose to buy is one characteristic that you cannot change. Other features, such as the flooring and the type of insulation are factors you can adjust, but be sure you do some good research before settling on a home and its location.
Get to know an area well, including the school district and schools located within its boundaries, and the crime statistics for the area. Although you may not have any children right now, a school district can affect a home's value whether the district is rated highly or poorly.
It is also a good idea to find out what the traffic in an area is like at various times of the day. Visit the area in the middle of the day and late at night to find out what type of activity is going on and how busy the area is. If, for example, you want to buy a home in an urban area with good nightlife, be sure to check it out in the evening hours to see how it measures up.