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First-Time Homebuyers

Homeownership is More Than Just Real Estate

Photo: Courtesy of Maximillian Conacher

Owning a home is a part of the “American dream,” and people will always aspire to achieve this goal. For most of us, buying a home is an investment in your future, but not just financially. Your home is where you will make lifelong family memories and where you will become a part of the community. Looking forward, it’s smart to take steps to better prepare yourself for homeownership long before you are ready to make an offer.

Saving early

Your down payment will play a big part in the type of loan for which you qualify. Even though there are loans available with as little as 3.5 percent down, it’s better to strive for 10 to 20 percent down, and remember you’ll have closing costs that equal another 2 to 5 percent of the home price.

Building credit

Your credit score also plays an important role in qualifying you for a mortgage; if you check your credit report early, you’ll have ample time to improve it. Scores range from 300 to 850; a higher score usually makes it easier to obtain a loan with the lowest interest rate. Paying off debt, paying bills on time, keeping credit card balances low and not opening new lines of credit can improve your score.

Using an agent

Ask family and friends for their recommendations; it’s important to select a real estate agent with whom you feel comfortable since you’ll be spending a lot of time with him or her. A realtor can suggest lenders who will guide you through the mortgage application and closing process, explaining what documents you will need to provide along with your loan options and estimated costs. 

Being realistic

Based on your discussions with your lender and help from an agent, choose neighborhoods that align with your budget and needs such as schools, places of worship, parks and close distance to work. An agent can show you homes that fit those needs.

It’s also important to remember that in today’s competitive market, your offer may not be the only one from which the seller has to choose. An agent can supply you with comparable sales of similar homes in the area; your offer should be consistent with those sales prices.

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