Are you contemplating purchasing your first home? First, congratulations! And second, don’t get duped. The process of buying a home today can be wholly overwhelming—coming up with a down payment, pre-qualification, pre-approval, finding an agent, touring properties—and that’s just a fraction of the process!
At Home Avenue, we know how confusing and nerve-wracking purchasing your first home can be. For over 30 years, we’ve helped homebuyers just like you secure the properties of their dreams. To help you make the most intelligent buying decision, and to clear up some of the confusion surrounding your first home purchase, we’re here today to discuss four useful first-time homebuyer tips.
● Know Your Loan Options
Have you long held the belief that you must come up with a 20% down payment? If so, this should be great news for you: you can put as little as 3% down, provided you know what to look for. Putting 20% down allows you to avoid purchasing private mortgage insurance, but it’s also a substantial chunk of change. In the Twin Cities metro, today’s average home sale price is around $290,000, making a 20% down payment over $50,000! While some buyers can come up with that kind of cash, many younger first-time buyers see that kind of down payment as a major hurdle to purchasing their first home.
Rather than delaying your purchase for years to save a mountain of cash, consider various mortgage options. Local and state housing programs offer first-time homebuyer assistance programs, so check to see if you qualify. Government-issued loans also require a much smaller down payment—in some cases, even zero down is an option. Before you shy away from purchasing your first home, consider all your mortgage options. You may just be able to afford more than you previously thought.
● Meet With Multiple Lenders
If you only meet with one lender, you could leave thousands of dollars on the table. The first lender you speak with may offer you a mortgage, but that mortgage may not be the best deal available. Try to meet with at least three different lenders, and ideally, a mortgage broker, too. The only way to determine if you’re getting the best interest rate, lowest lender fees, and the loan terms that fit your needs is to shop around, so don’t jump at the first offer you receive. An honest, qualified loan officer or mortgage broker will assess your situation and recommend the best options to suit your needs.
● Consider For Sale By Owner (FSBO)
As a first-time homebuyer, you may have ruled out for sale by owner properties, simply because buying an FSBO property seems far more tedious than it’s worth. However, FSBO properties are popping up everywhere these days, primarily because sellers hope to avoid the high commission rates charged by commission-based agents.
Today, many FSBO sellers work directly with flat-fee realty facilitation experts—like those at Home Avenue—who oversee purchase agreement paperwork, making the sale much more streamlined for both parties. If you are working with an agent, your agent will communicate directly with the agent facilitating the FSBO sale. Plus, when you leave FSBO properties open for consideration, you may find that you have more room to negotiate with sellers.
● Watch Your Credit Score
Just prior to closing the sale, your lender will pull your credit score just to make sure everything remains constant in your financial situation. One of the biggest—and most disheartening—blunders first-time homebuyers often make is electing a financial decision that impacts their credit score between mortgage pre-approval and closing. Don’t make that mistake!
When you’re waiting for the sale to close, keeping your financial status constant is key. Don’t apply for new credit cards, close old accounts, accumulate large balances on your existing cards, or take out new loans. Pay your bills on time and try to keep your balances below 30% of your available credit. You don’t want credit score changes at the last minute to affect your ability to purchase your dream home!
Flat-Fee Realty and Purchase Agreement Facilitation in the Twin Cities
When you’re looking to purchase a home, the expert agents at Home Avenue would be delighted to assist you. For over 30 years, we’ve been serving residents throughout the Twin Cities metro, making the real estate buying and selling experience as streamlined as possible. Our flat-fee realty services attract thousands of sellers, giving us an extensive library of listings from which you can choose. To learn more about the home purchasing process or to schedule a meeting, give us a call at 952-929-7355 or feel free to message us on our contact page today.