Buying your first home is a significant life experience. It’s a transition from renting or leasing to actual property ownership. Home ownership is the goal for more and more people every day.
There are a lot more things that you have to be responsible for as a homeowner. There’s no more landlord or property management company to fall back on when things need to be repaired or replaced.
You have to take care of things like burned-out light bulbs, lawn and garden maintenance, electrical and wiring problems, plumbing issues, heating and air conditioning issues and a lot more. On the flip side, owning a home can be a great investment!
Prospective owners should have no problem buying a home in Alabama. There are usually plenty of properties on the market in good neighborhoods.
Taking the time to find a home in your price range that has the amenities you’re looking for can be a time-consuming, but very rewarding process.
First-time home buyers often have a lot of questions and concerns. Here are a few handy tips that can ease some of the stress and worries.
- 💰 Set a budget
- 📋 Compare mortgage options
- 💯 Check your credit
- ☑️ Get a mortgage pre-approval letter
- 🚪 Attend open houses
- 🗺 Look at neighborhood information
- 💲 Start saving for your down payment now
- 🔍 Get a home inspection
- 🏠 Buy a home that meets your future needs
- 💵 Stay within your budget
- ☎️ Have Questions? Ask The Howell Group!
💰 Set a budget
One of the most important things is to find out what you can actually afford.
Start looking at homes to see what average prices are in locations where you’d like to live.
From there, you can determine how much you should set aside for a down payment, closing costs, homeowners insurance, any associated fees that may apply, utilities and moving expenses.
📋 Compare mortgage options
Once you know what you want, it’s time to start shopping for the best mortgage rates.
Feel free to compare offers and rates. Don’t just take the first offer that’s on the table. Also, check to see if you qualify for any VA or FHA loans.
There may also be county or state programs in your area that help first-time home buyers with tax credits, reduced interest rates and assistance with down payments and closing costs.
💯 Check your credit
Most lenders will check your credit, so it’s a good time to review your own credit report.
Check your credit score and pay attention to any discrepancies that can have a negative impact on your credit.
This is a perfect time to pay down any existing outstanding debts.
You should probably put a hold on any other major purchases until you know whether or not you’re approved for a mortgage loan.
☑️ Get a mortgage pre-approval letter
A pre-approval letter helps you become pre-qualified for a mortgage.
It show that a lender has reviewed your credit history and has recommended terms and conditions in which they are willing to lend to you.
It also gives you an advantage over other interested buyers who haven’t become pre-approved for a mortgage yet.
🚪 Attend open houses
One way to know for sure what you’re looking for is by attending open houses. Pay attention to open home notices and attend as many as you can that interest you.
You can learn important details such as the age of the home, any condition issues that need attention and when things like windows, doors, heating and cooling systems, shingles, siding and roofs were last replaced.
Don’t be afraid to attend second, third or even fourth open houses for properties that appeal to you the most.
🗺 Look at neighborhood information
Another important factor is where you want to live.
Once you’ve found a few houses that are within your price range, it’s time to start learning about your potential new neighborhood.
Do some research to find out where the local schools, hospital, shops, entertainment and other amenities are.
Find the latest crime statistics. Living in an unsafe neighborhood isn’t worth the investment.
You may want to take a weekend drive through the neighborhood to get adjusted to the noise and traffic levels.
See how long it takes you to get to work from that home and back.
💲 Start saving for your down payment now
Most first-time home buyers can expect to have a down payment of about 20 percent.
There are lower options depending on how you finance your home, but keep in mind that you may be paying more in terms of interest, have larger monthly mortgage payments or pay for things like private mortgage insurance which can cause you to pay more overall.
Start saving for your down payment as soon as possible. Take some time to review your current expenses, and see if there are any unnecessary items that you can eliminate.
Buying a home is expensive, and you need to have your finances in order before you commit to any kind of loan offer.
Budgeting smartly can help you afford the down payment sooner than you may have originally planned.
🔍 Get a home inspection
If the home seller hasn’t requested an inspection, you should definitely request one.
Most home inspections cost about $300 or more and take a few hours to complete.
The inspector will review the condition of the interior and exterior of the home.
They will inform both parties of any issues that should be addressed. Feel free to ask questions, and make sure that you get any commitments from the home seller in terms of repairs or maintenance in writing.
🏠 Buy a home that meets your future needs
Many home buyers go into shopping for homes looking for their current needs.
However, if you plan to start a family, those needs may change in just a matter of a few years from now.
Take some time to review properties that meet your future goals. Buying a small house now may be beneficial for your budget, but not your long-term plans.
💵 Stay within your budget
It may be tempting to look at houses that are above your price range. The problem is how you’re going to pay for those added costs.
Stick to your budget, and you should still be able to find a nice home that offers everything that you’re looking for.
Allow yourself some wiggle room for any unexpected expenses that may pop up or for a few extra luxuries when it’s time to move in or remodel.
These are some of the top things to keep in mind as a first-time home buyer. There’s a lot to think about and know.
Making a checklist of these and other items that come to mind can be helpful.
Talking to your lender and realtor can help ensure that you’ve got all of your bases covered. Stay on target, and you’ll soon be on your way to becoming a proud first-time home owner.
☎️ Have Questions? Ask The Howell Group!
Give The Howell Group a call today at 205-568-5435 to learn more about local areas, discuss selling a house, or tour available homes for sale.