Tips for Homebuyers
Buying your first home can be an exciting, yet often overwhelming, experience. These 11 tips will help you navigate the process.
1. Take a Montana Housing approved Homebuyers Education Class.
Buying a home is the most important financial decision you will ever make; become an informed buyer.
Find a class near you: http://www.nwmt.org/network
2. Clean up your credit.
If you have poor credit, you are a bigger risk in the eyes of lenders. You'll pay the price in the form of higher interest rates. Higher rates can reduce the amount of home you can afford or keep you out of the housing market altogether. Make a point of paying auto loans, credit card bills, and other payments on time and in full. If you want help developing a plan, you can contact a housing counseling agency, often at little or no cost.
You may need money for your down payment, closing costs, moving and other expenses.
4. Look for gifts and grants.
In addition to your relatives and friends, your employer might offer incentives for first-time homebuyers.
5. Get preapproved for your loan.
A lender can tell you generally what you can afford and how much you can borrow. This will give you an edge with sellers in a competitive market.
6. Be realistic.
Your dream house could quickly turn into a nightmare if you spend more than you can really afford. Pick a house with a mortgage payment that will allow you to be comfortable in other aspects of your life.
7. Consult with a real estate professional.
Real estate agents are invaluable in providing information about homes and their neighborhoods. In addition, if you hire a real estate agent as your representative, he or she will be working on your behalf and may get you a better deal on your home. Most of the time, buyer's representatives are paid out of the seller's commission.
8. Research the neighborhood.
A good real estate agent can help you with this. Check out the ratings of the neighborhood schools. Even if you don't have children, this could be important when you try to sell the house in the future. Also, make sure you know the proximity to anything that might be deemed undesirable, such as airports and major highways, and ask your real estate agent for zoning information on any areas surrounding the home and neighborhood.
9. Make any offer contingent on an inspection.
Even if the house looks perfect to you, chances are that it's not. A professional inspection can help you understand the condition of the property and identify problems you may encounter in the future. To find a home inspector in your area, consult the American Society of Home Inspectors.
10. Ask the seller for utility bills or estimates.
Costs for electricity, gas, and water can add up. Sellers should be able to provide copies of bills or estimates to give you an idea of what to expect.
11. Don't change your financial status.
From the time you decide to buy a home until you actually close on the loan is not the time to make major changes in your finances. Don't quit your job, don't buy a new car or make any other large purchases, and don't stop paying your bills. Changes like these can result in even a preapproved loan being denied before closing.