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Tips For First Time Home Owners

Updated on May 23, 2013

Use A Good Agent

Our first tip for first time home owners is to find a good agent to aid you in your search. The benefit of using an agent is that you are hiring someone who is experienced in the field. A good agent knows your local housing market. You will be able to tell them what you are looking for and they are much more likely to find the properties that an inexperienced eye will miss. A real-estate agent that only represents buyers is called an Exclusive Buyer Agent, and the best way to find them is to find brokerages that don't accept listings, meaning they do not take as clients people who wish to sell their homes. You will sign a Buyer Agency Agreement with your agent and in return they will help to find real-estate that fits your needs, specifications and costs, show you properties and negotiate prices and terms of real-estate purchase contracts.

Put 20% Down

Our second tip is to be able to put 20% down on your mortgage. This means that you are able to pay 20% of the cost of your home upfront. For example, if you wish to purchase a $20,000 home, you should have $4,000 to put towards your mortgage. The more money you can afford to pay initially, the less you will have to pay the bank. It will also help determine your interest rate. Banks will be looking for you to put anywhere from 10%-40% down on your house. The average is 20%.

Choose Your Neighborhood

When looking into buying your first home you'll want to carefully research your neighborhood. First, if you choose to stay in your home for the next 20 or 30 years your needs will change. You may be single now, but you may marry, have children, want a dog, want trees, etc. You should think carefully about the things you want in your future, and make sure that the area where you are buying your home fits those desires. But our population is more mobile than it used to be, and you may find that you want to move in 5 or 10 years. In that case, you will want to buy in a neighborhood where renting is common. Your mortgage won't go away if you choose to move so you'll have to rent out your home to support the mortgage payments. If you are thinking of moving in the future you may want to buy property in a city or near a college. Such places have large transient populations (populations without permanent homes) and it will be easy to rent out your house when you go.

Good Credit

It is very unlikely that you will be able to buy your home outright. You will most likely need to finance your purchase with a loan from a bank. Your credit score will determine what the interest rate on your loan will be. The worse your credit score, the higher your interest rate and the more you'll have to pay overall for your home. If you can, you'll want to have less than $1,000 in debt before choosing to buy a home.

Look At The Bones of the House

A house is a layered structure. Before buying you'll want to check out the bones of your house. That means check the house's foundations and it's structural integrity. Your house could look good on the surface, but it could be damaged structurally, making it a bad investment. On the other hand, your house could look pretty bad, but have good bones. A little work and you can have a very nice home. Make sure to get your home checked out, structure, water, electrical etc.

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