So, you have made the decision to purchase your first home. Obviously, you have never done this before and you are probably a little nervous about signing away a huge chunk of money for the next 30 years. Are you confused about where to start? Not to worry. We have done some research for you and have consulted our Real Estate Experts here at RMCU to help you. As a first-time home buyer, we want you to have the tools to save yourself some money and some stress. Below is our list of the best hacks for first time home buyers.
1. Ask Questions
This is the number one hack on our AVP of Real Estate, Peter Morgan’s list. Don’t be afraid to ask all the questions you could ever think of… and then ask some more! This is a BIG financial decision that will impact your life for the next 30 years. You want to make sure you comprehend everything before you sign on the dotted line. Plus, if you understand everything, you won’t get yourself into a contract that could cost you more money.
2. Find People You Are Comfortable Working With
Another one of Peter’s tips for first time home buyers is to find a lender, real estate agent, and other experts you are comfortable with. These people will be guiding you through the home buying process and if you don’t trust them, you won’t be honest with them. And that could end up costing you more money.
3. There Are Low Down Payment Options
No, you don’t have to save 20% to put down on your first mortgage. There are programs out there that exist to give you a little flexibility. HomeReady offers as little as 3% down, rural development programs have zero down payments, and even some conventional financing options require as little as 5% down.
4. Take the First-Time Home Buyers Class
Even if you are not using the down payment assistance, the class offers a TON of valuable information on the home buying process. The program is presented by the HRDC. The HRDC is a neutral party in your home buying journey and will give you information on all areas of the home buying process.
5. Get Pre-Qualified
Another MUST on our Real Estate Team’s list is to stop in and see us so you can get pre-qualified before you start the home search process. If you know what you qualify for up front, you will not be looking at houses out of your budget and you will save yourself some heartache. Also, when you put an offer in on a house you usually need to put down earnest money. This money could be forfeited if you are making an offer on a home you cannot afford or do not qualify for.
6. Know the Costs
Speaking of earnest money, there are some other costs associated with purchasing a home that you need to be ready for. Earnest money is one of those. Home inspection costs and closing costs are other things you should be prepared for.
7. Ask About Seller Concessions
Here is a real hack for you. Ask if the seller will pay the closing costs. In markets like Helena, Bozeman, or Butte closing costs could be upward of $3,000 and if the seller pays those, you save yourself some serious money. The seller is most likely going to fight you on it, but your Realtor will be able to help you negotiate.
8. Go To Open Houses Now
If you start going to open houses while you are still saving your down payment or before you’re really ready, you will know what you want when you are ready. Open houses give a good look at the inventory available in your market and the cost. They also can provide information on certain neighborhoods and tax costs.
9. Sweat Equity Can Go a Long Way
Going into your first home can mean you will make a lot of concessions. If you are willing to do to some labor at your new house, you could build some serious equity. The more equity, the more your home is worth.
10. Be Prepared to Explain Your Life
Do you have large deposits into an account that is not easily traceable? Did someone give you cash as a gift? Be ready to explain it to your loan officer who has to explain it to an underwriter. You may even have to explain a missed payment on a loan from YEARS ago so get ready!
Now that you are well educated in the hacks of the first-time home buyer, you can go forward and get your home! While some of these may seem more like information than hacks, we can assure you that getting educated on these topics can save you money in the long run. Do you have any hacks for the home buying process? We would love to hear them.
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