Your Guide to Buying Your First Home
Buying your first home is an exciting time for sure! It can also be a little unnerving too. Below are a few simple tips to help you make the most of buying your first home. Just remember, we are the home buying professionals and we have helped thousands of other first-time home buyers just like you purchase their home. You can count on our team to walk you through every step of your real estate transaction to your complete satisfaction.
Understanding Your Mortgage
First and foremost, let's talk about mortgages. Most buyers need one, and there are a lot of options that vary greatly from lender to lender and from buyer to buyer. This means it's important to understand what you're looking for and talk to a lot of different lenders to ensure you're getting the best deal possible.
What Do Mortgages Include?
There are four main components to a mortgage payment, often abbreviated as "PITI."
This is the repayment of the initial amount you borrowed from your lender (in other words, the price of your home).
This is a payment to the lender for the money borrowed (and is then added on to the initial price of your home).
Your annual city and county taxes assessed on your property are divided by the number of mortgage payments you make in a year and added into your mortgage.
Your monthly homeowner's insurance payment covers you against various hazards and is added to your mortgage payment.
Going Loan Shopping and Understanding Your Options
Before you decide on any particular loan or lender, it's important to do your research. That means meeting with AT LEAST two different lenders to ensure that you're getting the best rate possible. It's also important to understand two different types of interest rates offered by mortgage lenders.
Fixed-Rate Mortgage:
The interest on an FRM will not change, so your monthly payments won't change, making them very predictable.
Adjustable-Rate Mortgage:
The interest rate on an ARM will often be lower initially, but as interest rates do fluctuate with the market, they can be somewhat unpredictable or even result in higher payments.
Shopping Homes for Sale in Wilmington
Now it's time for the fun part! You get to start shopping! This is where you get to decide exactly what you want and need in a home, from the type of house or townhouse to the location of the neighborhood to all the exciting interior and exterior amenities you just have to have! Make sure you keep detailed records of the homes you visit, noting things you liked, didn't like, pros and cons, etc. Taking pictures can also help keep your memory fresh.
Tip: Before you start touring homes, determine the actual selling price of homes in your preferred neighborhoods—not just their listing price—to get a better idea of the actual affordability of the location.
Know the Difference Between What You Want & What You Need
Before searching for your first area home, it is recommended you make a list of your “wants” and your “needs” in your first home. Just to clarify, your wants are what you “desire” in a home and your needs are what you absolutely “must” have in your first home.
Below are a few questions to help you prioritize your wants and needs in your first area home:
- How close do you want to live to your office or to your family?
- Do you prefer to live in the country or in town?
- Are schools important to your first home buying decision?
- Are you willing to pay homeowners dues for amenities like a golf course, tennis courts, swimming pool, walking trails, and other recreational facilities?
- Do you wish to purchase your first home near big shopping and dining areas?
- Are you looking for a neighborhood that contains lots of younger families with small children, or are you looking for a quieter neighborhood environment with fewer small children?
- Has the neighborhood you are interested in held its value? (Our agents can provide statistics.)
Buying for Two: Compromise & Communication
As a couple buying your first home, it is important to remember to be ready to compromise on a home’s features. In addition, you should practice maintaining good lines of communication too. Maintaining good lines of communication with your spouse and with your Realtor is important. It creates an efficient first-time home buying process, plus it will make your home buying experience much more pleasant too!
Helpful House-Hunting Tips
Once you're ready to begin your search for your first home, remember these helpful house hunting tips:
- Always preview homes together with your REALTOR. They will eliminate homes that fail to meet your search criteria and your finances.
- Keep track of the houses you’ve seen by bringing along a camera.
- Be sure to take notes both positives and negatives about each home.
- Wear comfortable shoes and clothes so you can walk around and explore the yard or area.
- If you have small children, consider a babysitter. Once you've narrowed your choices, you can bring them along.
- Limit your daily search to four homes.
- Limit your search to homes that comfortably fit your budget.
Making an Offer
You found the perfect house, and now it's time for your and your agent to sit down and discuss your offer. It's important to work together to determine a price you can comfortably afford but will also be a realistic offer for the seller to accept and will not be dismissed against any competing offers the seller might receive.
What Will I Pay Upfront?
Earnest money:
Think of this as your security deposit. It's paid when you submit your offer to show the seller that you are serious. When your offer is accepted, it is applied to your down payment or closing costs.
Down Payment:
This is determined by your loan, or possibly any government programs or assistance you have requested.
Closing Costs:
These are typically low for buyers and represent the fees associated with paperwork and lender charges.
Requesting a Home Inspection
If the seller accepts your offer, it's time for a home inspection. Before you close, you'll want to have an experienced professional walk the house to ensure that there aren't any lingering problems or maintenance issues that might not be visible at first glance. You don't want to be hit with a serious maintenance or structural issue right after you move in. If necessary, you can request that the seller repair any issues you find.
Closing
If everything looks good, it's time to sign the paperwork, make final negotiations and payments, and get your keys!
Review Your Contract
Before you sign any paperwork, it's important that you carefully read over the contract with your agent or lawyer to ensure there are contingencies—that is, if something falls through with your mortgage, you aren't still obligated to buy the home.
Finalize Your Mortgage
Are You Ready to Get Started Buying Your First Home?
After you have prioritized your wants and needs for your first home, now you're ready to begin your home search. Contact us, and we will schedule a first-time home buyers consultation to discuss how we will help make your first home buying dream come true.
