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How to survive buying your first home

The lowest home prices in years are driving many people to purchase their first home. Few things are simultaneously as exciting and nerve wracking as becoming a homeowner. Preparation can make sure individuals are covering all of the bases.

First time home buyers easily can be overwhelmed by the process of buying a home. In addition to the legal hurdles associated with purchasing a home, the stress of committing such a substantial amount of money can lead to some sleepless nights.

But first time home buyers in the market for a home can prepare themselves for the process ahead of time. Though the following tips might not guarantee a smooth and stress-free home buying experience, they can answer a few questions and facilitate the process.

Establish your price range. As the housing crisis of the last several years indicated, many homeowners got in well over their heads. Some lost their homes to foreclosure, while others found it extremely difficult to pay their mortgage each month. First time buyers can avoid such scenarios by honestly assessing what they can afford and searching for homes within their price range. A host of websites, including some lender sites, provide free mortgage calculators so buyers can see just what they can afford. Lenders often recommend spending less than 30 percent of income on housing costs.

Research rates and taxes. Certain external factors beyond the price of the home will factor into a homeowner’s monthly financial commitment. Taxes and homeowner’s insurance can vary greatly depending on a home’s location. Research property taxes in different communities, and shop around for homeowner’s insurance when looking for a home.

Expect to pay costs. Closing costs are often a big shock to first time home buyers. Closing costs include lender fees, title and settlement fees, taxes, and homeowners insurance or homeowner association fees. Bankrate.com provides an annul closing cost survey for buyers to get a better feel of just what they will be spending when the time comes to sign on the dotted line. A lender can also give an estimate of what the fees may total.

Consult a professional. The best advice one can be given is to locate a well-experienced real estate professional that specializes in the given town or city the home is being looked for in. These professionals can protect buyers by ensuring all facets of the transaction are handled properly and that any challenges are handled efficiently.

 

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