First Time Home Buyers - Buyer Concerns

First Time Home Buyers – Buyer Concerns

Buying a home is a major decision that, as exciting as it may be, must be approached in a logical way to assure that you not only find a home to call your own, but you can also utilize as an investment for your future.

Many fear arise about buying a home. Some of these may include questions like:

Can I afford to buy a home right now?
Should I wait until the market gets better?
What if I don’t have a lot of money for a downpayment?
What if I can’t afford to buy my dream home?
Why does buying a home seem so complicated?

Let’s take a look at these questions:

“Can I afford to buy a home right now?”

The first step in buying a home is to get connected with a mortgage lender to get pre-approved for a loan. Doing so, before you even start to look for a house, will get you looking in the right price range for your budget.

Too many times I have worked with buyers who have assumed they could afford a certain price range and then ended up being disappointed when they finally get their pre-approval because they have fallen in love with a house they have seen, and it’s not in their budget.

“Should I wait until the market is better?”

Another concern is whether or not the market is right to buy in.

Buying when the market is at its peak is not the best decision, if you can afford to wait. Many people have purchased when the market has been at a high, and are then disappointed later when the market drops, and the home loses appraisal value.

Of course the best time to buy is when the market is at a low, because the value will increase when the market picks up again, creating a great return on your investment.

This also helps when you don’t have the 20% or more to put down on the loan, and have to pay mortgage insurance. The faster the home appreciates in value, the faster you can drop the mortgage insurance because the value in your home makes up the difference.

A Full-time Real Estate professional can help you determine if the market is at a high or low.

“What if I don’t have money for a downpayment?”

Many people are under the impression that they have to have a large amount of money for a down-payment to get a loan. While it’s great to be able to put down 20% or more, son you won’t have to pay mortgage insurance, it’s not always required. There are a lot of great financing programs out there that allow the buyer to put as low as 3% down.

The amount required for a downpayment will all depend on the program your lender can put you into, which will be determined by factors such as income level, debt-to-income ratio, etc.

This is another reason to get pre-approved for a loan, so you know how much money you will need to bring to the closing table, and whether or not you are going to have the right amount of money to buy a home.

“What if I can’t afford my dream home?”

Very few people are able to buy the home of their dreams when they purchase their first home.

According to the National Association of Realtors (NAR), 69% of all first-time home buyers in the United States have to compromise on some of the feature of their first home.

What you need to focus on is finding a home that will satisfy your core needs (location, price, schools, etc), and will be a good investment to build equity over time.

This approach will actually take you down the road faster to being able to afford your dream home, because (in a normal market) the house will usually gain value faster than the time it would take most people to save the same amount of money.

You need to think of your first home as a stepping-stone to get you where you want to go. Choosing a good home in your price range, that will have a good chance of appreciating in the near future, will give you the leverage you will need to eventually get that dream home you always wanted. An experienced Real Estate professional can help you find a home in an area that is bound to appreciate in value.

“Why does buying a home seem so complicated?”

Buying a home IS a complicated situation, because there are many factors to consider. That’s why it’s important to have a full-time Real Estate professional consulting you to help you make the right decisions, and handle the process for you.

Having a team of professionals to guide you through every step of the process (your Realtor®, your loan officer, your home inspector, your title company, etc) will make what is normally a complex system into a simple and pleasant experience for you and your family.