ready to buy your first home?
It’s important to be prepared when navigating new territory. To make your experience a little less nerve-wracking, we have compiled the following first-time homebuyer tips. If you're looking to purchase a home in Pennsylvania, New Jersey, Delaware, or Ohio, you may find these tips particularly useful in your home buying journey.
BUDGETING
Appreciating how much home you can afford is a major step in the home-buying process and it's easily accomplished by getting pre-qualified.
Pre-qualification requires you to provide the most basic information regarding your income and debt. This information will identify the maximum home purchase price for which you could possibly afford and qualify. Becoming pre-qualified will help narrow down your search to homes that are in your price range so you can confidently shop for your first home.
There’s more to budgeting than how much home you can afford. The best approach to creating a budget is taking a comprehensive view of all the possible expenses. There are expenses you will incur as part of the home-buying process like closing costs and moving expenses. Then there’s expenses you’ll incur once the home is purchased. In addition to a monthly mortgage payment, you should also consider:
• Annual taxes
• Required insurance premiums
• Monthly utilities
• Unexpected maintenance expenses
Outlining all of your potential and existing expenses against your income is an excellent way to make sure you can cover all that is required when purchasing a home.
HOME AND LENDER SEARCH
Once you have established an acceptable budget, you can begin the search for:
• A real estate agent
• Your perfect home
• The best mortgage solution
FIND A REAL ESTATE AGENT
When looking for the perfect home at a price you can afford, a real estate agent is a huge asset. The purpose of a real estate agent is to help you save time and negotiate a price you can afford. Do some research online or ask friends, relatives and colleagues for a recommendation. It's also helpful to note the areas you are considering buying in so you can find an agent that's right for you.
SHOP FOR A HOME
Once you understand how much you can afford and have a real estate agent to help, you can begin house hunting. With the various types of homes available, it might be difficult to determine which type is best for you and your needs. Take into consideration your stage in life, desired features/benefits and how many improvements you're willing to make before moving in. Below is a brief overview of the most common types of homes to consider in your search for the perfect home.
Detached, free-standing housing structures or single unit that can have either one, two or three levels and does not share walls with any other homes. These types of homes can offer privacy but also require more maintenance than other types of homes.
Condominiums are individually owned homes that are attached to one another in a multi-unit building or housing structure and feature common areas such as fitness rooms and recreational areas. Condominiums belong to an association comprised of all the condo owners. The association determines monthly assessment fees as well as rules that govern the building. While there is less maintenance required condos tend to have less privacy than a single-family home.
A townhouse, also known as a townhome or row home, can have one, two or three levels and shares walls with other similar units. Townhomes offer privacy like single-family homes and may require less maintenance if an association is in place like condominiums.
UNDERSTANDING YOUR LOAN OPTIONS
Our team at Univest strives to make the mortgage process for first-time homebuyers as straightforward as possible while meeting your homeownership needs and expectations. With a variety of affordable financing options available in Pennsylvania, New Jersey, Delaware, and Ohio, as well as competitive interest rates, our experienced mortgage professionals will help deliver the borrowing solution that's right for you.
A conventional mortgage is a loan that is not backed by a government agency like the Federal Housing Administration. It is available as a fixed or adjustable-rate and often requires borrowers to make a down payment of between 5 and 20 percent of a home's purchase price.
A FHA loan is ideal for first-time homebuyers or low to moderate income borrowers who are unable to make a large down payment. FHA loans require as little as 3.5% of the home's purchase price for the down payment and are available as a fixed or adjustable-rate.
A USDA loan is insured by the government and provides homebuyers with opportunities not available through other loan types. USDA loans offer many benefits such as 100% financing with no down payment but certain requirements must be met such as income limitations and property location.
A construction loan offers financing for the cost of constructing a home at a fixed or adjustable-rate. Typically, a construction loan provides the funds in installments in advance of the work being completed so you can build your dream home.
We have also put together a home loan checklist so you can appreciate the required documentation for a mortgage application. This will help you prepare and have all necessary information in order and ready to go when it’s time to apply for your mortgage.
QUESTIONS TO SEAL THE DEAL WHEN BUYING A HOME
Before you begin the closing process, it’s best to ask as many questions as possible until you’re comfortable with the answers. The people you have enlisted to help with this process are paid to provide assistance so utilize them to the fullest extent.
- What is this property worth in today's market?
- How flexible is the asking price?
- Are there any issues with the house as it stands?
- Is there a homeowner’s association fee?
- Is the property in a floodplain?
- Are there any tax exemptions on the property that go away upon the sale?
- What is the policy on a short sale?
- How long does the loan process take?
- Will my loan officer accompany at closing?
- What fees are expected at closing?
Still unsure about purchasing your first home? Check out our renting vs buying page.
Ready to buy your first home? Get pre-qualified now!
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