Buying for the first-time

Buying a house is not something many people do on a regular basis. The process can be quite intimidating to some, especially those who have never done it before. Today I would like to focus on a few tips to help out first-time home buyers. Actually, most of these tips would be helpful for any home buyer. 

Looking back to our first home purchase, there are a few things I wish somebody explained to my wife and I before we started. We weren't completely naive, however there seemed to be more confusion and uncertainty than we really needed. Overall, it wasn't a bad experience by any stretch of the imagination. We just seemed lost at points. Not sure what to expect next or why something happened. A lot of the confusion was really due to not understanding the process and what we were really looking for.

Here are a few tips to help focus on the early stages of buying a house. They really aren't in any type of order, since they are all about the same level of importance.

- Check your credit reports and correct any errors. This is really something to get in the habit of doing periodically, whether shopping for a new house or not. Not all credit reports are 100% accurate. Sometimes personal information is reported incorrectly. At a minimum, names and addresses may be misspelled or completely wrong. Accounts could be listed that don't even belong to you. Whether this is incidental or intentional, showing extra or incorrect account information doesn't help when mortgage lenders are processing your loan. Each credit bureau has steps for correcting or disputing information. Bad data on a credit report can mean the difference between loan approval and loan rejection. Take time to review your reports and ensure they reflect your true credit history.

- Know how much you can afford to bring to settlement. Buying a house is not cheap. The biggest sticker shock can be finding out how much you must bring to settlement. In general, the buyer will be responsible for a down payment and closing costs. Depending on the type of mortgage, the down payment can be anywhere from 0% to 20% or more of the purchase price. There are many different mortgage options available, so it is best to talk with a mortgage lender to understand the option that suits your situation. As for closing costs in Delaware, expect to pay between 3% and 5% of the purchase price. More accurate estimates can be provided by a mortgage lender.

- Know what type of property you are looking for. At any given time, there could be more active listings available than you can possibly deal with. It would be exhausting to visit every one. It can also be frustrating to take time to visit properties that just aren't right. By knowing your most important "needs", you can focus on those properties that are real possibilities. Start off with the type of property - single family vs townhouse vs garden style apartment? Is square footage important - large house vs small house? Do you want multiple floors or a single story? How many bedrooms? How many bathrooms? What kind of yard? These are all items that can help narrow down your search so you can focus on what is most desirable.

- Narrow down your search area. What's that saying - location, location, location? Do you want to be close to shopping, restaurants and entertainment? Are schools important? Do you want to be part of an existing community with many amenities? Close to transportation? If you are not familiar with some of the neighborhoods you are interested in, drive around at different times of the day or different days of the week. See if the area matches your expectations.

- Collect all of your financial records. In order to obtain a mortgage, lenders will request a seemingly endless list of financial records. Promptly supplying complete and accurate records will greatly help the mortgage approval process. Have the last several pay statements, bank statements and credit statements available when they ask.

- Stay away from major purchases or job changes once mortgage processing begins. While some things are unavoidable, make sure to communicate with your mortgage lender prior to any large purchases or job changes.

- Be realistic, be patient. Expect there will be some level of compromise at some point(s) in the process.

- Finally, work with a licensed Realtor. A licensed Realtor can quickly search for available properties that match your criteria. They can help you focus and to refine your searches for those items that are truly important to you. Your dream property! And once you find that dream property, the Realtor can help you through the purchase process. There will always be bumps in the road, but a Realtor will help smooth those over to the best extent possible.

Buying your first house should be a memorable experience. Memorable in a positive way. Great memories of unlocking that door for the first time and realizing what awaits is now your home! A place for many new and exciting memories!