10 Useful Tips for First Time Home Buyers

Purchasing a home is always a big decision, whether you've been saving up for years or acquiring a mortgage. This process can become overwhelming and complicated if you're not prepared.

The following are tips and pitfalls you'll want to avoid so that you can be well informed before purchasing a home: 

1. Prepare Your Finances 

One of the most important tips for buying a home is that you must prepare your finances. Your new home is an investement, but your home loan is also an investment for your bank. It's looking for low-risk customers for loans, so you'll have to show financial stability. You can start to prep your finances by making your payments on time and avoid opening new loans or credit cards and start saving for a down payment, although the amount you'll need may be determined by the mortgage for which you're applying. 

2. Determine Your Budget Early 

Your budget will depend on several factors, including the size of your down payment and what mortgage programs you'll be using. Mortgage calculators can help you determine your monthly payment, figuring out how much you can afford for a house based on your income. You will also need to calculate the costs of homeownership when you're determining your budget. These include maintenance expenses and property taxes. 

3. Don't Buy Solely Based on the Market 

The housing market is always fluctuating. There will sometimes be more houses for sale than there are interested buyers. This results in a buyer's market. Timing the market is the act of trying to predict the best time to buy and waiting until then. This could mean you'll save some money or face less competition, but attempting to time the market is something you should avoid. There can be more than one downside to waiting for the market to change, including spending more money on rent or risking the continued rise of home prices. 

4. Explore Your Mortgage Options 

There are many types of mortgage loans out there, including specialized loans for first-time homebuyers. Be sure you've thoroughly investigated all your options before you dive in with any one type of mortgage. 

5. Compare Several Loan Offers 

Each bank changes its own set of fees and this can lead to some significant differences in costs. Getting more than one offer is critical to finding the lender that suits you. Always try to get a preapproval letter from your bank once you're ready to start home shopping. Many sellers require that you have one before they'll accept an offer on a house. 

6. Make a 'Must Have' Home Feature List 

When touring homes it can be easy to add things to your list of needs and wants in a home. But you'll want to make sure that the list is true to what you really desire. Remember that there are many things you can change within a home but you can't change the location and the size of the home, so keep this in mind when you're determining your 'must-haves'. 

7. Hire an Agent 

A real estate agent is an expert at their job, which is to find the house that best suits your needs. They'll be able to tell you if a home is properly priced, whether the neighbourhood is good and how quickly properties are selling. They'll also be able to negotiate on your behalf and prepare the required paperwork for you. An agent is almost always a better option for a first-time homebuyer. 

8. Don't Skip the Inspection 

A home inspection is meant to uncover problems with the home's structure, plumbing, roof and other parts that could be very expensive to repair. You may have a keen eye, but a professional is going to be well equipped to examine the property. 

9. Plan Your Offer Carefully 

The offer you make will depend greatly on how the market is doing. You'll have more leeway to negotiate if there's less competition, but you may have to prepare for other offers if it's a seller's market. Listening to your real estate agent's recommendations is key when preparing an offer. An agent's guidance can make the difference between failure and success. You'll have to be flexible and creative to get your offer accepted. 

10. Negotiate Thoroughly 

Understanding how to negotiate is key, and this is another situation in which a real estate agent can be invaluable. You may have to negotiate if the seller doesn't accept your initial offer. Be ready and willing to negotiate with the seller in order to get the best deal, and don't be afraid to walk away if you can't come to an agreement. There's always another home for you.