Did you know that about 80 percent of millionaires made their first million in real estate? Indeed investing in real estate is one of the most secure investments there is. Sure, you have to be ready to wait if you are hoping to make a profit on your purchase but if you buy a house in the right market – Denver wink, wink – it might be all worthwhile. That being said, buying a home for the first time and really the whole buying process for that matter is not as easy as a walk in the park. Nevertheless with the right team behind you, you can make this whole experience as pleasant as possible. We’ve put together this list of five tips to get you started on the process.
1- Know how much you can afford
Before you start looking for you next “home sweet home”, you need to know exactly how much home you can afford. Spending time looking at homes that are out of your price range will be sure to disappoint later when you view less expensive homes. You will need to take into consideration, the following:
- Your down payment
- Your household income
- Your current debts (liabilities) and your monthly payments
- Your estimated monthly housing-related costs
- Your anticipated closing costs and other one-time costs
- Your current spending practices
2- Organize your documents
When it is time to apply for a mortgage, you must document your income and taxes. Usually, mortgage lenders will ask for two recent pay stubs, the previous two years’ W-2s, tax returns, and the past two months of bank statements, etc.
3- Consider your financing options
As a first-time homebuyer you have plenty of options to help you get into a home, including federally-backed loans and loans for homebuyers who don’t have the standard 20% minimum down payment. It is important to look into your state programs for first-time homebuyers. It will really pay off to shop around since the interest rate will have a big impact on the total payment of your home.
4- Create a list of specific features your dream house would have
Let us start by saying how vital it is to keep some flexibility in this list. However, your list should include some requirements, like neighborhood, size, room layout etc.
5- Find a REALTOR that will guide you through the process
A Realtor will help you find homes that meet your needs and within your price range. They will also assist you in negotiating with the other party, which include making an offer, getting a loan, and completing the paperwork.
Keep in mind that buying a home can sometimes take a long time, but knowing what you need and where to find it can save time and make the whole process a lot smoother.