A short guide to home buying for first-timers
Are you thinking of looking for your first home, but feeling a little lost? You might feel a little wary of the headlines about the 2017 sellers' market, financing options and more, but doing a little home buying homework can help to ease your fears. Start here:
Understand your credit
Start by ordering a free credit report from the three major credit reporting agencies, Equifax, Experian and TransUnion. Visit the Federal Trade Commission website for instructions on how to order your reports (you are entitled to a free one each year). Review the reports for any issues, and work to clear those from your record as soon as possible.
Establish a budget
Really dive into your monthly income and expenses to understand what you can afford; not just what you hope to afford. You want to buy a home that gives you the lifestyle you want, and that includes the ability to save and use money for non-home purposes. So, don't plan to tie up all your income in your mortgage. Begin by tracking your expenses for two or three months to get a handle on where your money is going. Then, set a realistic price range for your home search.
Save for a down payment
Many lenders want to see a down payment of 20 percent, but first-time home buyers, veterans and others may qualify for programs that allow for a smaller percentage. If you have the cash to put 20 percent down, however, that can help you avoid private mortgage insurance, which is a fee added to your mortgage until you reach the 20 percent mark. (Your real estate agent or mortgage broker can help explain PMI in more detail.)
Get pre-approved
Pre-approval from a lender can help you when it comes time to make an offer. This step shows sellers that you will be able to finance the home and helps ensure that you can close more quickly. Today's real estate market moves quickly, so pre-approval can strengthen your offer.
Search strategically
Many first-time buyers run into challenges because they have a long wish list for their first home. The key to finding a home that fits your needs and budget is creating a search strategy. That means paring down your wish list to a few "must-haves" and several "nice-to-haves." Keep an open mind and be flexible in your search. Decide what matters most to you (location, size, number of bedrooms, etc.) and go from there.
Work with experts
Working with a skilled real estate agent can make all the difference for first-time home buyers. Your agent can educate you about the process, help you create a search strategy and evaluate homes using an experienced eye.
If you would like to learn more about buying a home in Steamboat Springs, contact us using the form below. We will put our nearly 30 years' experience to work for you.