Should you buy a home this year or wait a few more months?
There are certain pros to acting now. The earlier you start the home-buying process, the more you'll avoid a crowded market. However, even if your goal is to get ahead of others, remember you'll be putting yourself at risk if your finances aren't secure.
Especially if you're a first-time buyer, there are some home buying tips you can't afford to ignore. Check out the following to see if you are ready to be a homeowner soon or if it's better to wait until you're more financially stable.
Tip #1: Figure Out How Much You Can Afford
Before you dive deep into finding a real estate agent, it's best to be honest about the state of your finances. As a first-time homebuyer, try to pay off all debt and have an emergency fund covering at least three months of expenses. Don't forget the 25% rule, which involves setting aside 25 percent of your monthly take-home pay for housing.
That percentage covers everything from principal to interest to property taxes, even homeowners association fees. To check which homes you can afford, you can try some online mortgage calculators.
Tip #2: Calculate Closing Costs
Along with saving for a down payment, you will need to set aside money for closing costs. Don't expect all sellers to chip in as a strategy to entice buyers.
However, you can still negotiate with sellers. It will depend on the local market, but you can try asking a seller to pay for repairs in advance.
Tip #3: Understand the Types of Mortgage Loans
ARMs, FHA loans, VA loans, and more! First-time homebuyers have options when it comes to loans and grants. Before you choose one, you must know what "the catch" is for each choice.
For example, adjustable-rate mortgages (ARMs) are attractive because of their low initial interest rate. However, after the initial fixed-rate period, your lender could increase the interest rate to the point of unaffordability. If you have a fixed income, an ARM can be tricky to manage.
There's also downpayment assistance (DPA) loans for certain cities. In Georgia, there's the Georgia Dream Homeownership Program. It may be worth it if you plan to stay in your home for a long time.
Other Home Buying Tips to Consider
Home inspection services are a must when buying a home. It helps to ask your agent what types of inspections you might need aside from a standard one.
Another home-buying tip is to purchase enough home insurance. Don't go all-in on a property that's not insurable. With a good agent on your side, this isn't a problem, as they will make sure you're well-informed about insurance issues before you even make an offer.
Are You Ready to Be a Homeowner?
Buying a home can be overwhelming, especially for first-timers. With these home buying tips, we hope the process becomes less challenging to tackle.
If you need more tips, you may browse our other posts. We also encourage you to check out our Buyer Resources to help you find your perfect home.
PMI South Atlanta is a proud franchise of PMI, the largest property management franchisor in the world. Whether you're tired of paying rent or want to be an investor, we want to help you choose the best property!
