Today, I have yet another closing with first-time home buyers. Many believe that first-time home buyers are young professionals or newly starting out families but that is not always the case. Several of my first-time home buyers have been over the age of 50 and five were actually over the age of 80! The world can be a difficult and challenging place to live and many folks don’t believe that they actually have the means to be home buyers and I love being able to assist them in showing them how they can.
One of my first time home buyers sent me this picture of their new door knocker for the front door! I LOVED it!
The key to buying your first home is preparation. I tend to look at it like getting ready for a business meeting. In order to have an effective meeting, you need:
A clear agenda: It’s important to take steps to understand the process, narrow down what you are looking for in your first home (it doesn’t have to be your forever home), and take steps to prepare. For instance, whittle down your debt and come up with a savings plan. In order to boost your credit score, pay down balances to at least 35% of the credit limit. Many suggest to not keep accounts at zero, but have a small balance you carry such as 20-50 dollars each month. The less debt you have helps you to afford more home and qualify for a lower interest rate on your mortgage.
Key players to participate: In order to have a successful meeting, you need the folks with knowledge to attend. Get a licensed and experienced real estage agent. Most everyone knows one nowadays and checking references, reviews, and conducting a few interviews will help you find one you are comfortable in working with. They will soon be your best friend and confidant in the purchase, so it’s important to choose a good one, especially if they have experience with first-time home buyers. Get pre-qualified for a mortgage BEFORE you even start looking at homes with a lender so you know the price of the home you can comfortable afford. A pre-qualification also lets sellers know you are serious about buying their home.
A plan: You will need money for a down payment, closing costs, moving expenses and possible repairs. A convenient way to approach this is to automatically set up an automatice savings plan with your bank or credit union. Another great way to obtain some additional cash is to have that yard sale, clean out your garage and start thinking like you are going to be moving. Instead of going out to eat or to the movies once a week, start going only once a month. If you write down everything you spend in a month, you will definitely be able to find ways to curtail some of your spending habits and start putting away your new home nest egg. Carefully review homes with your buyer’s agent and listen attently as they guide you through the process of buying your new home. The National Association of Realtors has lots of good information at www.houselogic.com/buy/first-time-home-buyer
Follow-up: So now you are in your new home, it is so exciting but you need to follow-up and make sure you pay your mortgage each month on time. This will avoid costly late fees and protect your credit score. Always maintain an emergency savings account – just in case – you have some unexpected repairs come up. And, if you really want to pay off that mortgage sooner – take the amount of your monthly mortgage payment and divide it by 12. Then, pay this amount over and above your mortgage payment. It will save you plenty of money in interest and doesn’t hurt too much on your pocketbook.
In closing, remember buying your first-home will be the most exciting and the scariest thing you will ever do, but with the right people in your corner – it will also be the most rewarding thing you will ever do. I look forward to continuing to help first-time home buyers realize their dream of buying their first home – no matter what their age!
I just wish I didn’t cry so much when I handed them their keys darn it!