First-time Homebuyers: 4 Ways to Prioritize
I loved the little townhouse my husband and I rented when we first got married. But when we started talking about having kids, my cute little place suddenly felt way too small. At first, looking for a home was an emotional roller coaster. It was hard to bridge the gap between the home I’d imagined and what we could actually afford. Fortunately, with each place we saw, our priorities became more and more clear.
In the end, we were able to find a home that we loved and could actually pay for—but it took a lot for us to get to this point. If you’re in the market for a home, learn from my firsthand experience and consider these tips to help you along the way:
Strengthen Your Credit Score
You know that you’re more than a few numbers on a page, but your home loan officer doesn’t. So, use those long months of house hunting to your advantage by finding ways to improve your credit score. The higher your score, the lower your down payment and monthly payments may be in the future.
Be sure to pull your credit report to ensure you’re not being penalized for unknown or unsettled debts. You should also stop applying for new credit at least one year before you apply for home financing, as these applications can hurt your score. Keep in mind that if your score’s lower than 680, you may have to pay extra fees or a higher down payment.
Consider a Real Estate Broker
There’s no shortage of online home sale websites, but for me, having a realtor was crucial. Our realtor gave us some much-needed perspective—pointing out flaws we didn’t notice and highlighting features we never would have thought considered. In addition to assisting the property search, a realtor can provide information about current market conditions, financing options and negotiating issues that may apply to your situation.
Know the Neighborhood
For us, finding the right fit was all about location. We wanted a safe neighborhood with a good public school system, but we made sure to look into the surrounding environment as well.
When you find a great deal, ask whether the home is located somewhere that may require additional insurance, such as a flood plain, or near a noisy junction, such as an airport, hospital or railroad track. If you’re concerned about noise or traffic on a particular street, try visiting the home during different times of the day.
It can be helpful to ask people in the neighborhood about pros and cons of the area. You may also want to research neighborhood organizations, which can give you a feel for the level of community engagement.
Set Your Priorities
The only way to find your dream home is to know what you’re looking for! Finding the right property shouldn’t take a miracle, but it may require some pre-planning.
First, figure out your priorities: What are you willing to give up? Would you trade fewer bedrooms for a larger kitchen, or a longer commute for a bigger yard? Keep a list of the features you’re looking for, and consider pricing, location and size, as well as amenities like a pool, garden or space for an addition.
No matter what you’re searching for, make sure you can afford the perfect place once you find it. Take stock of your current budget to determine your ability to make mortgage and insurance payments and to put money down. Remember that with home ownership, your property taxes may increase and maintenance costs can arise at any time. Also, you may want to get pre-approved for a home loan before you start looking—that way, you’ll be able to make an offer as quickly as possible.
As I’ve learned, the road to home ownership isn’t exactly a smooth one, but the bumps along the way are definitely worth it. After all, there’s nothing quite like having a place to call your own.Richelle Mon bonn is a contributing blogger and E-Business Marketing Manager at Allstate Insurance Co.