Buying your first home can be exciting, but it can also be intimidating. There is much to consider, from finding the right neighborhood to navigating the financial aspects of home purchasing. Fortunately, your experience can be seamless if you follow best practices. As you prepare to enter the real estate market, there are things to consider to ensure you are making an informed decision.
Standout from other buyers
First-time home buyers can stand out by preparing themselves as desirable buyers in a competitive market. One way to do this is to get pre-approved for a mortgage, showing sellers you are serious about purchasing a home and have the financial means to follow through with a contract. Sellers often want to avoid working with buyers who don't have pre-approval for a mortgage because it poses more risk. Sellers want a seamless process with minimal delays, and financial security can be a significant issue.
If you are unfamiliar with pre-approval for a mortgage, it simply means that a lender has checked your credit and verified your financial information to determine your maximum loan amount for a home purchase. This process typically involves providing documentation of your income, assets, and debts. Having pre-approval helps you understand what you can afford so you can start your home search with a targeted approach. Pre-approval can be a powerful tool in a competitive housing market, where sellers may receive multiple offers and look for ways to quickly and confidently choose a buyer.
Interview potential agents to find the right fit
Securing a home, especially for the first time, can be overwhelming, and finding the right real estate agent can make a significant difference. A good agent should be knowledgeable about the market and easily guide you through the process. They should be accessible and communicative and follow ethical standards. While this sounds excellent, not all agents have equal skills, talents, and professionalism.
When searching for a real estate agent, it is essential to interview candidates to find the right fit for you. Ask your family and friends who recently bought or sold a Bearspaw home for recommendations and personal experiences. During your interviews, look for an agent with a proven track record of successful transactions, expertise in neighborhoods you are interested in, and those willing to listen to your needs, concerns, and priorities. Take the time to meet with several agents to find the one you feel comfortable working with and who can help you navigate the competitive real estate market as a first-time home buyer.
Save for a down payment that makes sense for you
Another critical aspect of preparing to buy a home is saving for a down payment. While some loans may allow you to put down as little as 3% of the purchase price, it is a good idea to make a down payment that makes sense for your financial situation. Many first-time buyers feel they cannot purchase a home because they do not have a sizable down payment. This notion is based on misinformation because first-time buyers can purchase a home with a small down payment.
A larger down payment can make your monthly mortgage payments more affordable and can also help you secure a more favorable interest rate. Of course, the amount you will need to save will depend on the price of the homes you are considering, but you do not need a 20% down payment. Some buyers feel more comfortable, even if they have the ability to make a substantial down payment, saving money for other expenses or emergencies.
Prepare for other expenses
Entering the housing market as a first-time home buyer is an exciting and life-changing event. Still, it is essential to remember that there will be additional expenses beyond the down payment. For instance, prepare for the costs of closing the sale on your new home. Many people forget this essential expense, and it can be costly. Closing costs can include fees associated with the property transfer and expenses like filing fees and property taxes. Like a down payment, closing costs are a percentage of the home sale price, but unlike a down payment, closing costs can be negotiated and partially covered by the seller.
Research available loans and assistance programs
Becoming a first-time home buyer is a big step, and many tools are available to make the process easier. Your lender can help you understand the loans and assistance programs offered to assist buyers in different financial situations. For example, there are FHA loans for those with smaller down payments and VA loans for military veterans and their families. Additionally, first-time buyer programs can provide cash toward down payments and help with closing costs.
Register for a home buyer education class
As a first-time home buyer, educating yourself about the entire process is helpful. One way to do this is by registering for a home buyer education class. These classes can provide you with valuable information about the necessary steps, from home loans to home inspections, and can give you a clear understanding of what to expect throughout the buying process. These classes can also provide first-time homebuyers valuable tips for making informed decisions and avoiding common pitfalls.
Learn more about buying your first home
The McKelvie Group is a Calgary real estate team specializing in upscale communities like Bearspaw. Contact them to learn more about purchasing a Bearspaw home and how you can prepare for the experience.
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