First time home buyer tips come in all shapes and sizes. From little tricks of the trade related to the mortgage process to insider information on selecting a real estate agent, there surely is no shortage of guidance available to a first time home buyer. But much of this important information is fragmented — meaning a first time home buyer must look in many places to get the information they need throughout the home buying process. This lengthy and often convoluted research process can deter a first time home buyer from starting the home buying process. Well, look no further. Our team of experienced brokers at Blue Water Mortgage have put together a detailed compilation of some of the best first time home buyer tips available. It is our hope that a first time home buyer who follows some or all of these surefire tips will be better prepared for their first home buying experience. Tip 21 — Be Real About Your Budget The idea of being realistic with your budget pretty much applies to anything in life — shopping at the mall, going to the grocery store or planning a vacation. But this is principle is especially necessary for a first time home buyer who is taking all the necessary steps to buy a house. In fact, of all of the first time home buyer tips out there, this may be the most important. This ratio measures housing expense as a percentage of gross income income before deducting for Social Security, Medicare, and taxes. Mortgage lenders expect a borrower to have a housing expense ratio of 28% or less. The total expense ratio would be 36. The last thing you want is to find the home of your dreams and then have the financing fall apart. It is the nightmare of every seller that they will tie up their home for months with an unqualified prospect. A seller wants a fast sale. Eventually, after shopping around, you will find mortgage terms that make the most sense for you. The next step will be to get pre-qualified, which involves providing your lender with various details related to your credit score, income and assets. Your mortgage broker will then verify all of the information you gave them and issue a letter telling you how much the bank is willing to lend you. And remember, a pre-qualification is not a guarantee. Tip 19 — Deal With Your Debt…Now! Debt comes in all shapes and sizes. When dealing with debt obligations, a first time home buyer should get their before applying for a mortgage. A delinquency on a student loan will not only damage your credit score, it could also stop you from qualifying for a home loan. This is particularly true if you have a government-backed student loan and apply for a loan from the Federal Housing Administration, Veterans Affairs, or the U. Department of Agriculture Rural Development, because your lender will check the federal Credit Alert Verification Reporting System database to make sure you are not in default on any government obligations. Tip 18 — Monitor the Market A first time home buyer should be like a hawk — surveying the local and regional real estate market similar to how a hawk surveys its prey. By knowing how the market behaves, a first time home buyer can monitor the selling prices of comparable homes in their area, which thereby allows them to be a bit more knowledgeable when going to look at homes. Getting started is pretty light lifting. Real estate listings are also abundant on the Internet, through sites like. This is also a good way to vet the people who may end up helping you apply for a mortgage and may hold the keys to your new home. If you have in fact found a broker and a real estate agent that meets your needs in terms of understanding the process, be sure that these folks are also professional, friendly, honest and courteous people. Another good first time home buyer tip is to ensure that your real estate agent and broker are able to work together. Tip 16 — Penny Pinch Maybe you go out to eat less, maybe you make your own coffee instead of buying it every morning, maybe you reconsider going on that vacation this winter. Whatever it is, a first time home buyer will need to be as frugal as possible prior to buying a home. Keeping in mind that you will have to make some sacrifices, both large and small. Be sure to find the methods that work best for you. Tip 15 — Get Organized Organization is a key component to the home buying process. With so much information related to the mortgage process, not to mention the search for that right home, a first time home buyer should try and find an effective way to keep all of this information together. If you take an organized approach to finding the right real estate for your lifestyle and budget, you will have your dream home in no time. Also, consider creating a checklist as a guide to follow throughout the process. Tip 14 — Create a Wish List A wish list a will allow a first time home buyer to prioritize what they want in a home, thereby making the real estate search a little bit more focused and easier to deal with. Wish list items can include: a pool, a big back yard, central air, office, playroom etc. The National Board Realtors reported earlier this spring that properties sold faster for the fourth straight month in April, reflecting the prolonged lag in inventory relative to demand. But BE AWARE: this only works if you have all of your ducks in a row and feel comfortable pulling the trigger. This principle relates to not only the search for that perfect home, but also translates when figuring out the terms of your home mortgage loan. Tip 11 — Lock in a Rate ASAP Timing is everything when it comes to getting ideal mortgage terms. When dealing with lenders, especially in a down market, be aware that your bargaining chip is the fact that you are interested and they want your business. This gives you some wiggle room to shop around. But when dealing with home price negotiations, tread lightly. This process can be a. Tip 9 — Know Your Rights Knowing your rights as a mortgage borrower is key for a first time home buyer going through the home buying process. Department of Housing and Urban Development recommends a first time home buyer be aware of their rights before entering into any loan agreement. Because remember, buying a home is perhaps the largest and most important loan you will ever get. You have the RIGHT to know what fees are not refundable if you decide to cancel the loan agreement. The Consumer Financial Protection Bureau recently enacted a slate of for borrowers. These are especially important if you run into issues with your mortgage servicer in 2014 or fall behind on your payments. Tip 8 — Consider Life After Buying Your First Home The excitement of buying that first home can sometimes blind a first time home buyer to the true investment of home ownership. Personal finance guru that before committing to a mortgage amount, a first time home buyer should take into account the true cost of making those monthly mortgage payments — such as the amount of principal, interest, taxes and insurance payments that will come about each month. For instance, that green grass that comes along with your new home will eventually need to be cut and that old fence will likely need to be fixed at some point. While both of these activities may require a financial investment of some sort, they also require some time and energy on the part of the homeowner. Tip 7 — Select a Reputable Home Inspector This is a no brainer for a first time home buyer. Selecting a knowledgeable home inspector is just as important as a great real estate agent, and in the long run, can save you thousands of dollars. The first thing you should do is ask friends, family and co-workers for referrals. Also be sure to talk to your broker, if you are using one, as well as your real estate agent. Some other good recommendations, according to this , involve: asking tough questions, checking for complaints and getting it all in writing. Tip 6 — Survey Your Surroundings While the type of home you choose is of utmost importance, so too should be the neighborhood that surrounds it. In the case of getting to know your neighborhood, take the time to consider all of the that can play into whether a neighborhood is right for you. Tip 5 — Get Serious About Your Credit Score Lack of a good credit score can be one of the biggest obstacles a first time home buyer will have to conquer when buying a home. Generally, a first time homebuyer with a higher credit score will have a better shot at securing a mortgage loan with a low interest rate, meaning lower monthly payments. A , however, will experience difficulty securing that low interest rate, among other things, and will likely incur higher monthly payments. Luckily there are some simple steps a first time home buyer can take to begin the healing process now. They should give you a Visa and a MasterCard against the funds that you gave them. Use these cards monthly for gas or something nominal and pay it off in full each month. This will build a credit history for you. Within 6-12 months you will have established credit scores. Once you have established credit, you can ask for your secured funds deposit back. You obviously want to make sure they had a good credit history with these accounts. Department of Housing and Urban Development recommends you contact one of the HUD-funded in your area to talk through other options for help that might be available to you. Also, be sure to check with your local government to see if there are any that could help you. Tip 2 — Fly Under the Radar A first time home buyer should try to stay out of sight when waiting on approval for a home mortgage loan. Things like overspending or taking on new debt can throw a wrench in a potential approval. We hope you enjoyed our list of top 21 first time home buyer tips. With over 150 years of collective mortgage experience, our prides itself on helping our clients understand all elements of the home buying process. Be sure to stay connected with us for all of the from the Blue Water Staff.
