Taking the plunge is an easy, and daunting, way of identifying commitment. From student loans to car loans to mortgages, finances are overwhelming for people of all ages.
But where are young buyers to begin when searching for a home of their own? Real estate agents and professionals agree on a number of strategies for the first-time buyer, or any young buyer that has questions or concerns about the process.
Buying Your First Home
Develop your credit. Unless your plan is to go into a Real Estate office with a big bag of money ready to sign off on paper work, developing a history of credit is essential. NBC reporter John Schoen advises that determining your mortgage eligibility precedes everything: "Shopping for a mortgage will also help if you can get “pre-approved” for the amount you’d like to borrow. This means the lender has looked over your credit and financial statement and agreed to lend you the money. Sellers like pre-approved buyers because there’s less risk the deal won’t go through." Finding out what type of loan you qualify for determines what you can borrow, but, even more important, it establishes a reasonable and comfortable monthly payment.
Decide what type of property you want. Do you need a single-family home, condominium or a rural farmhouse? The possibilities are endless and shopping around for the right abode can mean a large list of expectations. Be prepared to compromise.
Gauge how "hot" or "cold" the market is within the areas you prefer. Driving through preferred neighborhoods, going to open houses, looking at comparable properties and chatting with real estate agents will help determine how active the area's market is and what average home prices are.
Get your down payment. Often the most dreaded and difficult part of being a first time-buyer is collecting and storing away for a down payment. For young buyers, saving up the recommended 3 to 20 percent of the prospective home’s price can be frightening. Talk to your lender about first-time buyer programs, gift funds, or other ways to get down-payment assistance.
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