Ten Tips for First Time Homebuyers

According to the National Association of REALTORS, approximately 40% of all homes are purchased by first-time home-buyers. Others have done it, and you can do it also.

1. Think Credit. Poor credit will make you a bigger risk in the lenders eyes, and more risk means higher rates and steeper monthly mortgage cost. Make a point of paying credit card bills, auto loans, rent, and other payments on time, all the time, and in full. A good credit score is important in getting financing.

2. Consider Taxes. When you buy a home, mortgage interest and property taxes are generally deductible from income taxes. This means while monthly housing cost may be larger when you own than when you rent, what you save in taxes can make up some or all of the difference. For details, speak to a tax professional or ask your Baldwin agent for a rent versus own comparison.

3. Know the Sales Associate's Role. Real estate agents are at the center of a property transaction. It is important to know what a real estate professional does, who is represented, and how the system works. The professional agents at Baldwin can explain and guide you through the process.

4. Location. Consider what locations will work best for you. Look at your needs, the needs of your household members, and your preferences in terms of commuting, shopping, recreation, and other factors that are important to you.

5. Home Inspection. Plan on getting a home inspection as part of the offer you make. A professional inspection will help you understand the condition of the property and the repair bills you may face in the next few years.

6. Financing. Look into the financing process as soon as possible. Get pre-approved so that you will know how much you can borrow, what you can comfortably afford, and get an estimated payment. Sellers will take you as a serious buyer if they know you are pre-approved. Your Baldwin agent can recommend a reputable, experienced lender.

7. Save. You will need money for a down payment, closing cost, moving, and other expenses. Put off trips and luxuries until after you are in your new home. Do not make other major purchases after you are pre-qualified until speaking with your loan representative.

8. Financing Options. Examine the different financing options, which are open to you. Consider FHA, VA, and state-backed programs, which offer programs with small down payments and liberal qualifying standards.

9. Look for gifts and grants. According to the National Association of REALTORS, 22 percent of all first time homebuyers receive gifts from relatives and friends. Some companies offer grants and other incentives to employees who are buying a first home. Check with your 401k programs or profit sharing program. Some offer loans against vested interest for home purchases. Community groups may also have programs and financing in place. The Federal Government offers special financing programs for teachers and police officers.

10. Timing. Start now, take your time, and ask your agent a lot of questions. Being a first time buyer may be challenging, but will be worth the effort when you own your first home.