7 Tips for First-Time Homebuyers
Moving to Seattle, Washington and shopping for your first home? This is an exciting time, but it can also be stressful as many first-time homebuyers grapple with various aspects of what will likely be the biggest investment of their lives. Read on for some useful, practical tips that will enable you to get through the purchase of your first home with minimal financial stress.
1. Be Realistic About What You Can Afford
While many beautiful houses for sale in Seattle are likely to catch your eye, it’s important to be real about what you can afford and what you can’t. Assess your budget and make an estimate of how much you can spare for a monthly house payment without making substantial sacrifices elsewhere. Take the Seattle cost of living into consideration and keep in mind that you might have unexpected expenses, so you will want to leave some wiggle room for yourself.
It is commonly recommended that your monthly housing costs, including taxes and insurance, do not exceed 25% of your monthly income. Working from that, you can determine your upper house price.
2. Check Your Credit
When you apply for a mortgage, whether you are approved or not will be determined in a large measure by your credit. It will very likely affect your interest rate and loan terms.
Therefore, checking your credit is one of the first things you should do before you begin your journey towards owning a home. Try to pay off any debt you possibly can and check for factors that might bring your credit score down.
You will want to keep your credit score from going down from the moment you apply for a mortgage and until your home loan closes. Therefore, during that period it would be prudent to avoid opening any new credit accounts or getting behind on payments.
3. Compare Mortgage Rates
Comparing mortgage rates, preferably from at least three lenders, can save you a bundle of money. Many prospective homebuyers skip researching this and go with the first quote they get, which often means they do not solidify the best deal. So get three quotes, at least, comparing rates and fees. You might also want to ask the lender if they would be willing to allow you to buy discount points – this means you pay interest upfront, bringing down the interest rate on your loan.
4. Choose the Right Type of House and Neighborhood
You may find a property that seems like the perfect fit for your family, but another thing you will want to consider is the neighborhood. Two virtually identical houses in two different neighborhoods will have different prices. A house in a certain neighborhood may have better value over time and be easier to sell eventually.
When you look at a neighborhood, check safety and crime statistics, and research local schools and amenities such as grocery stores, pharmacies, and hospitals. These things will affect the value of the property and your comfort in the area. Also, drive through the neighborhood at different times on both a weekday and a weekend, gauging the levels of noise and traffic. If you only see the property once and your visit falls on an atypically quiet or noisy day, the impression can be misleading.
5. Find the Right Real Estate Agent
When looking at buying a house, it is highly important to pick a real estate agent that is right for you. The ideal real estate agent will be highly motivated, with thorough knowledge about the area you are researching, and willing to work with you to find your ideal home.
Even more importantly, the right real estate agent must be someone with a high sense of professional integrity, prioritizing their client’s interests at all times, and determined to find the right property for you rather than just pushing a deal.
6. Budget for Closing Costs and Move-in Expenses
Most people know they should save for a down payment, but you also have to budget for the sum you will need to close your mortgage, which will most likely be between 2% and 5% of your loan. Closing expenses include homeowners insurance and home inspections.
Some houses will be in pristine condition, and you can simply move in. But if you buy a fixer-upper, you can expect to spend a considerable sum on improvements such as repairing a roof, interior and exterior paint, installing new kitchen cabinets, or replacing busted piping. Be realistic about how much you will need to invest – during the period of preparing to move in, many new homeowners feel like money is trickling between their fingers, especially if they are tempted to add things like new furniture, appliances, and rugs.
Being realistic about your move-in timetable is very important here as well. Some repairs will need to be done before you move in while some can be made after, so consider how long you will be in your current residence and if you’ll need to make short term stay arrangements while work is being done on your new property. Make sure you consider your comfort and peace of mind during the home improvement process.
7. Think Long Term
A house may look perfect for you today, but what about tomorrow? Do you plan to expand your family? How long do you expect to stay in this house, and how easy do you think it will be to sell it? A savvy approach would be to go for the most affordable piece of property in the best neighborhood. This way, you can budget to improve your home bit by bit over time, adding value to your property. Everyone’s needs are different, though, so keep all these factors in mind when choosing a home, and don’t rush! With the right guidance and skilled real estate professional, you’ll find your new dream home when the time is right!
For buyers it’s about finding a home and neighborhood where they can say, “This is my place. This is where I would love to spend the next 2, 5 or 50 years.” From start to finish, creating a smooth process for all individuals involved and successfully bringing it to close is what Vicinage Real Estate Group is all about. Let us help you find your dream home in Seattle!
Written by Laura Highsmith
I can't think of anything more satisfying than helping others find the home that speaks to them. We are all unique individuals with our own personal tastes, whether selling or buying it's my goal to help guide you through the process to a successful close. Let's talk!