Essentials for First-time Home Buyers

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Buying a home is not usually an easy thing to do. There are many obstacles to overcome and various factors that you will need to contend with. If this is your first time buying a home it can be particularly difficult for you to overcome the learning curve. The following are some tips in helping first-time homebuyers navigate the process of making their first property purchase.

Begin saving now

The down payment for a first home will likely be a large amount of money for most people. Although there are some special loans available for first-time homebuyers they will still mean a significant amount of money required upfront. You may be able to find a first-time homebuyer loan for as low as 3%. However, for a $400,000 home that will still be a $12,000 down payment. That is a considerable amount of money for many everyday people.

Closing costs and move-in expenses can also be significant costs you should be saving for.

Find the right mortgage

There are various types of home loans for which you may qualify. It is important to understand the details of each type of mortgage in order to choose the right mortgage for you.

A conventional mortgage is one that is not backed by a government guarantee. Some conventional mortgages are especially designed for first-time home buyers and can have down payments as low as 3%.

You can also consider a loan insured by the Federal Housing Administration (FHA) which can require down payments as low as 3.5%. U.S. Department of Agriculture (USDA) guaranteed loans are specifically designed for home buyers in rural areas and generally do not require a down payment.

The Department of Veteran Affairs (VA) loans are government guaranteed loans for veteran and current military personnel. Usually, VA loans do not require a down payment.

You should also compare different rates offered on mortgages. Generally, the longer term mortgages will have higher interest rates.

Do not be afraid to negotiate

It is usually worth it to at least try to negotiate the price of the home with the seller. However, your negotiating power will depend on the supply and demand dynamics of your local housing market. In some cases, you may be able to convince the seller to lower the selling price. On the other hand, you may be able to negotiate with the seller to pay for repairs before purchasing the home.

Find the right real estate agent

It is important to choose the right real estate agent who will thoroughly search the market for the right home that meets your needs and will competently help you go through the negotiating process and closing procedures. Be sure to interview numerous real estate agents. Ask them about their previous experience in working with clients who are first-time home buyers. Inquire exactly how the real estate agent will assist you in obtaining your first home.

Stay within your budget

Work with your financial advisor to determine what is realistically within your budget and make sure to not go over this limit when choosing your first home.

Raymond James Financial Services and your Raymond James Financial Advisors do not solicit or offer residential mortgage products and are unable to accept any residential mortgage loan applications or to offer or negotiate terms of any such loan. You will be referred to a qualified Raymond James Bank employee for your residential mortgage lending needs.