Property prices are the lowest they’ve been in a decade or more. Mortgage rates continue to hover near historic lows. This is great news for first-time buyers.
“It’s a great time to buy if you’ve got the credit,” says Andrew Firoved, chief executive and founder of CounselorDirect.com. “They say buy low, sell high, and you’re buying low.”
To make sure you buy low and smart, here are a few tips:
Make sure buying is for you. If you are planning to move in the next few years or if your job outlook is uncertain, buying might not be a good move. After all, the days when houses could quickly be flipped for more money are all but gone. If you don’t feel that you are going to stay in your job or current location then consider renting.
Do a credit check. Cash and good credit are critical to snagging a bargain home and keeping it. Before you start looking, make sure you have the cash on hand for a down payment and a mortgage lender who is willing to provide you with a home loan at an affordable rate. Pre-approval can help expedite the closing of your purchase.
Consider a down payment and the alternatives. It is suggested that first-time home buyers cough up 20% of the home value. This immediately adds equity to the house and lowers monthly payments. However, many first-timers don’t have the cash to put up 20%. No need to worry; there are options that should work for you. There are several government-backed loans with 0% to 3.5% down, and a handful of other alternatives.
Be realistic about costs. Don’t look for a home that will eat up all of your monthly income. In addition to mortgage and principal payments, buying a home means paying for insurance, maintenance and real estate taxes. One of the biggest mistakes first-time home buyers make is they don’t leave themselves with enough money.
Don’t cut corners on inspections. Always cough up the extra cash for a good home inspection, expecially if you’re buying a foreclosed home. A home inspection is key to really understanding the condition the home is in.
If you’re thinking about buying a home, we can help. Get started here.