Here's what every first-time home buyer needs to know to dive into house hunting with confidence and with as few curveballs as possible.
How much home you can afford as a first-time home buyer?
Homes cost a bundle, so odds are you'll need a home loan, aka mortgage, to foot the bill, along with a hefty down payment. Still, the question remains: What price home can you really afford? That depends on your income and other variables.
In general, experts recommend that your house payments (mortgage, maintenance, taxes) should not exceed 28% of your gross monthly income. So, for example, if your monthly (before-tax) income is $6,000, multiply that by 0.28 and you'll see that you shouldn't pay more than $1,680 a month on your home.
But online calculators give just a ballpark figure. For a more accurate assessment, head to a lender for mortgage pre-approval. This means the bank will assess your credit history and other factors, then tell you whether you qualify for a loan, and how much. Mortgage pre-approval also puts home sellers at ease, since they know you have the cash to back up your offer.
Pick the right real estate agent
Buying a home requires transfer of a deed, title search, and plenty of other paperwork. Plus there's the home itself—it may look great to you, but what if there's a termite problem inside those walls or a nuclear waste plant being built down the block?
All of which is to say, you will want to have a trusted real estate agent by your side to explain the ins and outs of the process and help you make the best decisions at every step. Make sure to find an agent familiar with the area where you're planning on purchasing; the agent will have a better idea of proper expectations and realistic prices, says Mark Moffatt, an agent with McEnearney Associates in McLean, VA. "Finding a Realtor is not hard, but finding one that is best-suited for you and your purchase is a challenge," he adds.
Know there is no such thing as a perfect home
understand that real estate is about compromise. As a general rule, most buyers prioritize three main things: price, size, and location. But realistically, you can expect to achieve only two of those three things. So you may get a great deal on a huge house, but it might not be in the best neighborhood. Or you may find a nice-sized house in a great neighborhood, but the price is a bit higher than you were hoping for. Or else you find a home in the right neighborhood at the right price, but it's a tiny bit, um, cozy.
Such trade-offs are par for the course. Finding a home is a lot like dating: "perfect" can be the enemy of "good." Or even "great." So find something you can live with, grow into, and renovate to your taste.
Do your homework
Once you find a home you love and make an offer that's accepted, you may be eager to move in. But don't be hasty. Don't purchase a home without doing your due diligence and add some contingencies to your contract.
The most common contract contingency is the home inspection, which allows you to request a resolution for issues (e.g., a weak foundation or leaky roof) found by a professional.
Another important first-time home buyer addition: a financing contingency, which gives you the right to back out if the bank doesn't approve your loan. A pre-approval makes this possibility much less likely, but a pre-approval is not a guarantee
You also might want to consider an appraisal contingency, which lets you bail if your lender values the home at less than what you offered.
Know your tax credits
The first-time home buyer tax credit may be no more, but there are a number of tax breaks new homeowners may not be aware of. The biggie: Mortgage interest deduction is a boon for brand-new mortgages, which are typically interest-heavy. If you purchased discount points for your mortgage, essentially pre-paying your interest, these are also deductible. Some states and municipalities may offer mortgage credit certification, which allows first-time home buyers to claim a tax credit for some of your mortgage interest paid. Check with your Realtor and local government to see if this credit applies to you.
El Paso TX and Las Cruces NM Homes for Sale Luis F Navarro and Ana Maria Navarro Team, Real Estate agents in Exit West Realty El Paso TX. Luis specializes in commercial and residential properties in El Paso TX and Ana Maria Navarro with license also in New Mexico specializing in Las Cruces, Anthony, Santa Teresa, Sunland Park. Whether you are searching for your personal residence, an income or commercial property, or you are introducing your home to the marketplace; our team can help make your real estate dream a reality. We are bilingual and can help you find the property of your needs either in English or Spanish. If you have any questions regarding El Paso TX, Anthony, Santa Teresa, Las Crues,Vado NM Homes for Sale call us today. Luis F Navarro (915) 731-4545 and Ana Maria Navarro (915) 820-8484