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Up to 9.2 million Americans will purchase their first home in 2020. Homeownership is a wonderful and sometimes overwhelming experience. It's exciting to have a place that you can personalize and call your own. However, owning a home can quickly become a burden if you don't plan carefully. Keep in mind these five tips to make your first-time home-buying experience a success.
Essential tips for first-time homebuyers
1. Save until you have a 20 percent down payment.
Paying cash for a home is out of reach of most families. However, there are big advantages if you have at least a 20 percent down payment to offer. This automatically means that you won't have to pay for private mortgage insurance (PMI), something that generally adds a full one percent to the cost of your loan. In addition, a sizable down payment means you'll likely have equity in your home when it comes time to sell.
2. Get pre-approved for a loan.
When shopping for your first home, it's easy to fall in love with a property that may be a little beyond what you can comfortably afford. Getting pre-approved for a loan lets you know what you can safely pay for home payments. Plus, the sellers will know that you're serious about buying and that financing won't be a problem for you.
3. Get your agent's advice on how much to bid.
Real estate markets vary dramatically around the United States. Your local real estate agent is well-suited to help you navigate the market in your particular region. In some high-demand areas, you may need to offer more than the listed price, but in most areas, a seller is likely to accept an offer below the listing price, especially if the property has been on the market for a few months.
4. Be prepared for closing costs.
Closing costs, the money that you'll owe at closing for property taxes, title insurance, the title company's fee and other related costs, can be a surprise to a first-time homebuyer. These costs can vary between 3 and 5 percent of the total purchase price. The average closing costs for a single family home is $3,700 and is due when you sign the purchase papers, usually between 30 and 45 days after your offer is accepted.
5. Make sure you have an emergency fund.
While it may be tempting to sink your all of savings into your new home, what with a deposit, closing costs, insurance and doing any necessary remodeling, it's important to put a few months' mortgage payments in an emergency fund just in case life throws you a curveball. Many things can affect even the most responsible homebuyer's ability to pay their mortgage, things such as illness, job loss or a reduction in work hours. Plus, you'll sleep better at night knowing that you have that financial cushion.
About the Author
Sheida Rezazadeh
Our Mission Statement:
Our philosophy is simple: clients come first. We pledge to be in constant communication with our clients, keeping them fully informed throughout the entire buying or selling process. We believe that if you’re not left with an amazing experience, we haven’t done our job. We don’t measure success through achievements or awards, but through the satisfaction of our clients.
About Me:
With over two decades of experience in the real estate industry, I derive immense satisfaction from assisting clients in realizing their real estate aspirations. My journey in this field commenced with personal investments and the management of multiple properties, providing invaluable insights into the dynamics of the real estate market. Over the years, I have refined my negotiation skills, accumulating extensive knowledge and experience that empower me to deliver exceptional service to my clients.
As a seasoned professional, I specialize in residential, luxury, multi-unit, and commercial real estate. I possess the acumen to secure top dollar for sellers and the best possible prices for buyers. Recognizing the significance of creating a home sanctuary as a mother and wife, I understand the security that real estate investments can bring. It's not just a transaction; it's a life-changing experience, and I am dedicated to guiding my clients through every step of the process.
Leading a team of highly-seasoned real estate professionals, we are committed to providing personalized service. We take immense pride in building enduring relationships with our clients and tirelessly work on their behalf to help them achieve their real estate goals. Our team comprises the best and brightest in the industry, consistently striving to lead in research, innovation, and consumer education.
As a trusted resource in the complex world of real estate, I am devoted to providing the best and most timely information to my clients. My team and I stay up-to-date with the latest trends and developments in the industry, utilizing this knowledge to help our clients make informed decisions. It's not just about buying or selling a home; it's about building a better future for you and your family, and I am honored to be a part of that journey.