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Home Buying Tips for First Time Homebuyers

Portrait Of First Time Home Buyers Standing Outdoors In Front Of House When it comes to buying a home for the first time, there’s a lot to learn! From understanding the mortgage process to determining your budget and knowing what to look for in a quality house, the process of purchasing a home can be pretty intimidating. This leaves many young homebuyers looking for guidance and wondering where to turn.

As an experienced NY mortgage broker, Maple Tree Funding has helped thousands of people through the home buying process. We know the real estate and mortgage business inside and out, making us a valuable resource for first time homebuyers, veteran homebuyers and those looking to refinance.

Here, we’ll share our top home buying tips to help first time homebuyers navigate the challenges of the home buying process.

Top 7 Home Buying Tips

If you’re in the market for a new home, following these recommendations will help you find a home you love on a budget you are comfortable with.

1. Understand Your Credit

Before you start the home buying process, you’ll want to make sure you understand your credit. Since part of the process of becoming pre-qualified for a mortgage is having your credit scores pulled and your overall credit assessed, knowing what NOT to do ahead of time is key.

If you’re planning to apply for a mortgage in the somewhat near future, here are a few tips:

  • Pay down your high balances on any credit cards or trade lines you have open.
  • Don’t close any old trade lines. Having older trade lines is part of the FICO scoring model, and the longer you have had good trade lines, the better it reflects on your score.
  • Don’t open up a lot of new trade lines right before you apply for a mortgage. All liabilities from any new opened credit will count towards your overall debt to income ratio and will affect your purchasing power.

2. Get Pre-Qualified First

Early on in the home buying process, work with a licensed mortgage loan originator to determine your budget and get pre-qualified for a mortgage. By gathering a few documents and running a quick check on your credit score, a loan originator can give you a range of what you can afford. Staying within that range while you look for homes will help you to avoid falling in love with a home that’s too far outside your price range and budget. Being pre-qualified can also help you move quickly once you’ve found a house you’d like to make an offer on.

3. Don’t Forget About Taxes, Insurance, and Utilities

When you get pre-qualified for a home loan, you will most likely be given a maximum range that you can afford. This usually comes in the form of total monthly payment.  Total monthly payment includes the taxes on the property. Taxes can range quite a bit, sometimes by hundreds of dollars a month for a similarly priced home. It all depends on the county and school taxes for that specific area. Your licensed loan originator can help you determine if the taxes put you over the qualification limit.

In addition to taxes, you’ll also want to consider the other expenses that come along with homeownership. When considering your price range, keep in mind that you’ll be paying for utilities like heat, electric and water, as well as homeowners insurance, and possibly mortgage insurance.

4. Decide What You Want in a Home

Make a list of the must-have features you are looking for in a home, along with the features that you’d like to have but are not absolutely necessary. This will help you to determine whether or not houses that show up on the market are worth looking at, and save you the time and effort it takes to visit homes that don’t have the features you absolutely need.

5. Look at Numerous Properties

While you may get lucky and end up falling in love with and purchasing the first property you see, you should definitely look at more than one property when you’re shopping for a home. Compare the houses you visit. Picture yourself owning each home, make lists of pros and cons, and work closely with your real estate agent who may be more critical about the property than you may be.

6. Work with a Realtor

Realtors can be very beneficial to you during the home buying process. They can show you homes that fit your criteria, are another set of eyes looking at a home and can point out questionable features of a home you may not have otherwise noticed. They can also help with negotiations and sales price comparisons. Additionally, realtors have substantial experience with the home shopping and purchasing process and can provide you with advice and guidance, keeping your best interests in mind.

You’ll want to find a realtor you feel completely comfortable with, so don’t be afraid to contact a few different agents. Since they will be helping you through the process, you want to make sure you are working with someone who understands your goals and needs. Keep in mind that, in most cases, your agent will be paid by the seller from the sale of the home.

7. Shop for Mortgage Products

Once you’re ready to move forward with a home loan, be sure to shop your mortgage options. There are many different mortgage products out there. You should find out which ones you qualify for and then compare those options against each other.

Sometimes banks only offer traditional, one-size-fits-all loan programs. Keep in mind that you may qualify for government mortgage programs that are better suited for you than traditional programs. If you are a veteran, make sure you look at VA mortgage options. If you are buying in a rural area, ask about USDA programs. Sometimes FHA programs have a lower monthly payment and lower closing costs than conventional products based on your credit score. Working with a licensed mortgage broker is a good idea, as they should be able to give you many mortgage options to choose from.

Looking for More First Time Homebuyer Tips?

If you’re preparing to buy your first home and you’re in need of a little more guidance, check out our First Time Homebuyers FAQs!  

Ready to take the first step towards making your dream of home ownership a reality? Contact Maple Tree Funding at 518-782-1202 or fill out our easy online contact form to get started today!

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