7 Questions First Time Home Buyers Need To Know

Real estate transactions can sometimes be confusing to even seasoned professionals. Most of the time, a real estate transaction is very straight forward and has very little stress involved. The key to a smooth transaction is knowing the process, doing your due dillegence and preparing all your documentation.

Many first time home buyers never move forward in the process of buying a home due to stress, fear or even a lack of knowledge about the home buying process. A great real estate agent that knows your local market will help you move forward toward your goal of home ownership. Answer the following questions and have them ready to provide your REALTOR® at your first meeting.

1. How Much Home Can I Afford?

The only way for most buyers to know this answer is to speak with a mortgage professional. To calculate an accurate number will involve providing some financial documentation. You will also need to answer a few question about your current obligations. Your payment will be reffered to as PITI or principle, interest, taxes and insurance. This number will give you a great estimate of your potential payment.

2. What Are the Current Mortgage Rates?

Mortgage rates not only change every week, but every day and even hourly. The primary reason for rate changes are directly tied to the united states economy, the Federal Reserve Board, inflation, the job market and many other indicators. These rates can be effected by credit score which you can actually effect.

3. What's the Process of Buying a Home?

The home buying process can be summarized with the following steps:

1. Get a mortgage pre-approval
2. Search for homes
3. Tour homes with your agent
4. Select a home
5. Make, negotiate, and execute an offer on your desired home
6. Get the home inspected and negotiate repairs
7. Get all information to your mortgage agent
8. Close on your new home

4. Should I Use a Real Estate Agent?

With all the recent press about the NAR commisions lawsuit there is a great deal of bad information floating around the internet. You definitely should engage a real estate professional to assist you. We actually created a blog post with our thoughts on this.

5. What Should I Look for in a Home Inspection?

First is a home inspection necessary? A home inspection is vital for both existing homes and new construction homes. It is possibly the best investment you can make in your home purchase efforts.

Here are some great details about the home inspection process: The TAO of a home inspection.

6. How Much Should I Put Down for a Down Payment?

This is a very personal decision. The more money you can afford to put down the less your payment will be. You really need to consult with both your mortgage professional and your financial manager.

7. What Are the Hidden Costs of Homeownership?

Beyond the mortgage, buyers need to be aware of closing costs, moving expenses, furnishing, potential renovations, and ongoing maintenance costs which can add up significantly.

Other than your mortgage, you will face many costs that get bundled into the 'closing costs' of your home purchase. We have created a very detailed blog post about them. Shocking Closing Costs.

In Summary

Don't let your questions or fears stop you from living the American dream of home ownership. This is why your financial planner, mortgage agent, title agent and REALTORS® all have a job. We focus on getting you into your dream home. We work very hard to help you and your family and take great pride in being professional while doing it.