Three Things First-time Buyers Should Do Before Falling in Love with a House

Sponsored by: Residential Home Funding Corp

There are obviously more than five things you should know before buying your first home. Seriously, there’s a lot to consider. It’s a big commitment. Think about it, it involves a contract. Perhaps, all on its own, a contract isn’t daunting, but there’s also a mortgage. A mortgage isn’t a lease agreement; it isn’t for a year or two. The typical mortgage is thirty years. Beyond the whole paying-for-it obligation, there’s insurance and maintenance and taxes and your time. Potentially there are regime fees and HOAs.

First things first, you should also, at the very least, know whether or not you’re going to live in the house for at least five years. So while a homebuyer, especially a first-time homebuyer, doesn’t necessarily buy a home “for life,” a homebuyer should consider beyond what she or he can afford today to what they can afford down the road, even a decade from now. Realize too that real estate isn’t a recession-proof investment.
Above all else, do these three things before falling in love with a house:

1. Check out programs.

There are countless programs that specifically help first-time homebuyers; these programs might be federal or state and, if you live in a bigger city, even local. Declaring you’re a first-time homeowner should be the first words out of your mouth when shopping mortgages and figuring out if you qualify for any type of grant or other resource.

2. Secure financing.

To secure a mortgage you’ll need your credit score and your income. You’ll need to consider your outstanding debts and other financial liabilities, as well as any assets you have. Have all of your documentation at the ready—and do your homework. Have an idea of where mortgage rates are, and what your best-interest-rate scenario is. Also, when it comes to securing a mortgage, you don’t necessarily want to spend every dollar you qualify for.

3. Think about your cash.

A down payment is never a bad investment, but a homebuyer also wants to have a pretty good idea of what they can comfortably spend each month on principal and interest. It’s also a good idea to ask the seller or seller’s agent to share recent utility bills and tax assessments. Again, do this before you’re smitten. That 1930s bungalow that caught your eye might not be insulated—can your monthly allowance for energy cover July’s electric bill?

There are other obvious considerations. Like using a trusted realtor, thinking location over space, and being able to look “beyond the paint.” Did you know that with the help of your realtor you’re able to continue negotiating after a home inspection? In any event, before tackling all of the rest of it, your to-do checklist should read: programs, financing, and cash. Once you’ve accomplished this, go fall in love.