Table of Contents
- 1 Tips from a Realtor: 9 Questions to Ask Before Buying Your First House
- 18.104.22.168 By: Maggie Kennedy
- 22.214.171.124 1. Can you afford a down payment?
- 126.96.36.199 2 Are you ready to settle for 3-5 years?
- 188.8.131.52 3. Can you get pre-approval?
- 184.108.40.206 4. Do you have a lender?
- 220.127.116.11 5. How much can you afford to pay monthly?
- 18.104.22.168 6. How’s your credit score?
- 22.214.171.124 7. What do you want in a home?
- 126.96.36.199 8. Do you have a real estate agent?
- 188.8.131.52 9. Have you planned for a home inspection?
Tips from a Realtor: 9 Questions to Ask Before Buying Your First House
A few weeks ago we shared one reader’s journey of becoming a first time homeowner. One of her tips? Get help from a realtor! Gaining the advice of an expert can ease the process and make it feel much less overwhelming. We decided to follow her advice and weigh in with Superbly Single Girl Maggie Kennedy, a realtor with Partners Trust in Los Angeles. She shared a checklist of the 9 questions any Single Girl who wants to buy her first house should ask herself. Consider this your personal cheat sheet to one day having a place to call your own!
By: Maggie Kennedy
Purchasing your first home is an exciting step in your life. If you are already thinking about taking the plunge, congratulations! You are one step ahead of most people our age. Even if you aren’t ready to buy a home quite yet, it’s important to begin thinking about it well in advance. There are many things you can do to prepare for when the timing is right! Here are 9 factors you’ll want to consider when you think you’re ready to buy your first house:
1. Can you afford a down payment?
Lenders usually require a down payment of at least 20% of the home’s purchase price. Closing costs add 3-5%. First time homeowners are eligible for FHA loans, and sometimes can put down as little at 3.5%, but if possible, I highly recommend putting down closer to 20%. Doing so will give you immediate equity in the home, lower your monthly payments, drop your need to purchase mortgage insurance, and will make your offer stronger. Keep in mind that if you are putting less than 20% down, it is very hard to compete against offers with high down payments. If you are buying in a hot market, you may want considering postponing the process until you’ve saved more cash.
2 Are you ready to settle for 3-5 years?
Just because you can afford to buy a home doesn’t mean the timing is right. It’s important to consider how long you see yourself living in the home or holding on to it. Generally speaking, you’ll want to plan on living there for at least 3-5 years. You need that time to build equity and recoup the expenses you’ll invest in the purchase. If you don’t feel secure in your job, or if you see yourself moving out of the area in the near future, you should probably stick with renting until you are settled.
3. Can you get pre-approval?
Once you’ve decided to buy a house, speak to a lender as soon as possible. You will work with your lender to decide on the financing options and mortgage package that are best for you including how much you can afford, what interest rates to expect, and what your down payment and monthly mortgage payment will be. Your lender will also give you a pre-approval letter, which you will need when you make an offer on a house. Keep in mind that your lender will look at your credit score. It helps to have a top-notch credit score before buying a home. If your credit score still needs work, don’t fret! Your lender may have suggestions on how to improve it.
4. Do you have a lender?
If you don’t know a lender, ask for recommendations from friends or family members who are home owners in the area in which you are thinking about purchasing . It’s important to get a reputable lender who knows your area and has a reputation for closing. A lender who slacks can lose a deal for you. If you already have a real estate agent, ask them for referrals. They’ll know good lenders in the area.
5. How much can you afford to pay monthly?
Just because a lender has approved you for a certain amount doesn’t necessarily mean it’s wise for you to spend that amount. Consider your monthly budget carefully. Do your monthly mortgage payments leave you with enough for your regular living expenses? In addition, you’ll need to carefully consider the added expenses of being a homeowner such as repairs and improvements, maintenance, insurance, and furniture, and include them in your budget. Don’t get in over your head!
6. How’s your credit score?
Gaining pre-approval doesn’t mean you’re free and clear for loan approval. Whatever you do, do not get charge happy, make cash investments, or open new credit cards! Save your cash and continue to watch your credit carefully until the purchase of your new home closes. The slightest ding in your credit could cost you the deal.
7. What do you want in a home?
Look on websites like Trulia and Zillow to see what you can afford in different neighborhoods. Pop in some Sunday open houses to check out the neighborhoods and homes. Make a list of likes and dislikes in the homes you are viewing.
8. Do you have a real estate agent?
Once you’ve been pre-approved and done some preliminary research, find yourself a good real estate agent to help with your search. There are a ton of real estate agents out there, but their quality varies greatly. Do your homework! Ask friends, family members, and other home owners for recommendations. You want a real estate agent who is an expert in the buying process, responsive and attentive to your needs, and knowledgeable about the market in your area. Find someone who you trust and believe is truly looking out for your best interests. This is one of the biggest financial purchases you will ever make, so you need someone who is on your side and knows what they are.
9. Have you planned for a home inspection?
After you’ve gotten an accepted offer, you’ll have some time to do your due diligence on the property. Don’t skimp on inspections! Listen to your real estate agent’s recommendations. Inspections may seem costly at the moment, but they can save you a lot of money in the long run by preventing you from committing to a house that is going to have problems down the road. If the inspections turn up some problems, don’t despair! The seller will often issue a credit to you for necessary repair.
Good luck with the house hunt and have fun! Please contact me if you have any questions or need advice. I am here to help!