The Top Four Mistakes First Time Homebuyers Make (And How To Avoid Them)

As a first time buyer, you’re probably excited to start the process of looking for your new home. But before you get your comfortable shoes on and start looking at listings, there are a few things you should do first. Many first time buyers forget to do these steps and end up regretting it in the long run.

1. Waiting to get Approved

Getting pre-approved is a good way to help narrow down your home search for a few reasons. First, it helps you get an idea of how much you can spend. It is one thing to try and come up with a budget based on your own math, but the bank will have the final word on exactly how much you can spend, and it may be a different amount than you anticipated.

The second reason to get pre-qualified before you start looking for a home is to confirm that you have everything in place that you need to in order to buy a home. The lender will ask for proof of your employment and check your credit as part of the process. Any issues that may come up during this process are better to know about up front so you can attempt to resolve them before you enter the purchase process.

2. Limiting Yourself to One Area

Many first time buyers go into the process with a set idea of where they want to purchase a home. But the perfect home that hits all of their must haves might just be a short drive away. Staying open to seeing properties outside your desired area will help you have a better idea of how far your money will go. Oftentimes, purchasing just outside a trendy area will get you much more within the same budget, and a good real estate agent can steer you towards these homes as long as you are open to seeing them.

3. Only Seeing a Property Once Before Buying

Even if you fall in love with your dream home and are sure you are going to buy it, it still makes sense to visit the home more than once before you put an offer in. Visit on a different day of the week or different time of the day to see if traffic around the area is much worse at a given time, or if you see issues on the exterior of the home during the midday hour.

4. Going With The First Mortgage Lender You See

Shopping around to see the different rates that are offered to you is well worth the effort and time. Even if the rate you end up getting is only lower by a few percent, the savings you will have over the life of the loan can add up to hundreds or even thousands of dollars.

These common mistakes are easy to avoid making with a little planning and some work up front. As a first time buyer, you have to be willing to conduct some research and do a little legwork to ensure you get the best possible deal.

5 Ways First Time Buyers Can Prepare for Homeownership

Buying a home is a goal many people want to accomplish this year, and the good news is that it is easy to accomplish with a little planning. It’s never too early to start making baby steps towards buying your first home by informing yourself and starting a savings plan. If you already know that homeownership is one of your future goals, here are some easy ways you can lay the groundwork now.

1. Start Deciding on a Price Range

A large factor in your home search is how much you can afford. Most experts recommend that you spend around 25 percent of your income on housing. Using this ratio, calculate how much you can afford to spend on your mortgage monthly.

2. Take a Look At Your Credit

When you apply for a mortgage, the lender will look at your credit to determine whether you are a suitable candidate for approval. Pull your credit report and look for any discrepancies you can have removed or any debts you can start paying off.

3. Build Up a Move In Fund

There are a few expenses that you can anticipate around the time you actually purchase and move into a home. Closing costs have to be paid when you close on the purchase of your home and can include:

Origination fees charged by the lender
Title fees
Taxes and insurance

On top of closing costs, you can expect to put money out for movers, repairs, and new furnishings. Saving up a little at a time now will help you be prepared when it’s time to purchase.

4. Narrow Down Your Search Radius

Start looking at the neighborhoods where you may want to purchase and see which ones you may end up crossing off your list. Certain communities have homeowners association laws and fees that you may find restrictive, while others may end up being too far of a commute from your job or too traffic-heavy for your personal taste. Eliminating these contenders from your list now will save you time and effort when you start looking.

5. Get Ready for The Added Cost and Responsibility

Owning a home is very different from renting, and comes with a completely new set of responsibilities. Once you are in your own place, there is no property owner to call when something goes wrong. You can prepare by learning to do small repairs and home improvements by yourself, and informing yourself about the signs of damages around the home so you can spot them.

If you are ready to start looking for your first home, the Core Group can help. Click here to find out more about how we can help you find a home in the Central Florida area.

Top Tips for Selecting a Low Maintenance Home

One of the main issues potential homeowners face is the amount of time and money that home maintenance requires. If you’ve gotten used to apartment living, the idea of having to handle the issues that arise yourself instead of calling the landlord can be overwhelming. One of the ways you can avoid spending a ton of effort and cash on maintaining a home is to choose a home that requires less maintenance. Here are some tips for choosing a home that requires a minimum amount of maintenance.

Pay Attention to The Outer Materials

Before you consider buying a home, take some time to research what materials the home was made with. These materials will dictate how often you need to repair or replace parts of the home. For example, a homemade with siding or a wood frame will naturally need more maintenance than a concrete or brick home. Shingle roofing is more susceptible to the elements than metal, and might need repairs after a heavy wind or severe thunderstorm. Take a few minutes to google how often the materials that make up the majority of the home are expected to last, and factor this into your decision to make an offer.

Consider The Yard and Garden Maintenance

Here in Florida, you can count on having to maintain your lawn and garden year round. Some of the questions you should ask to help you determine the amount of yard maintenance you’ll be in for include:

What type of grass was used for the lawn?
Does the lawn have a built-in irrigation system and how old is it?
Are the plants annuals or perennials?

If you want to do minimal maintenance, a home with stone landscaping can be a perfect solution. With no grass to cut, you’re guaranteed to have less work than the average homeowner. But remember that when the hot weather comes, your stone front yard may attract snakes and lizards who enjoy sunning themselves on this type of yard.

Select a Home With Long Lasting Interior Finishes

The outside of the home is not the only area that needs regular maintenance. Inside the home, items will wear out and need replacement, so it pays to look into the materials and finishes used inside as well as outside. Granite countertops may look great, but they will need resealing every three to five years. Soft carpeting may feel nice on your feet, but tile or wood flooring will last longer and be harder to damage. Consider how important these finishes are for your interior décor plans versus the amount of time they will take to maintain or replace.

By taking some time to consider how a home is made and what materials were used, you can be sure you won’t be spending all of your time performing maintenance and repairs. A low maintenance home will give you the freedom to enjoy your evenings and weekends the way you want.

Do Millennials Want To Be Homeowners?

There is a perception that millennials are breaking the habits of their parents and grandparents when it comes to home buying today. It seems as though those born between 1981 and 1997 are renting longer, living with parents and may even be weighed down with student loan debt with a lack of interest in buying a home for themselves.

However, a NerdWallet analysis examined a number of data and surveys from government agencies and private organizations that found many of these common assumptions about millennials to be false. The research showed that a majority of millennials would prefer owning a home to renting, but appear to be postponing due to real, as well as perceived difficulties in affording a home.

The Millennial Market

66 Million individuals in 24 million independent households make up the U.S. millennials. (1)
The median income for a millennial over 25 years old is $38,220. (2)
The median age of a first-time home buyer in 2015 was 31 years old. (3)
Two-thirds of millennials haven’t yet reached the age of 31 and 22% are under 25. (4)
Millennials are expected to form 20 million new households by 2025. (5)
The median rental period in 1980 was 5 years, as opposed to 6 years today. (6)

Truth: Millennials Want to Buy Homes

In a 2014 survey by Fannie Mae, it was discovered that a majority of millennials consider owning a home
to make more sense than renting- for both financial reasons as well as lifestyle reasons. Some reasons included control over their living space, flexibility in future decisions,
security, privacy and taking pride in having a nice home. In this survey, 49% said their next movie would likely be to own a home.

Overall, the Fannie Mae survey painted a picture of a positive outlook on buying a home. Even experiencing the housing market collapse in the recent recession, two-thirds of current millennial renters said that now was a good time to buy a home.

“There’s a strong indication that millennials do want to become homeowners, which is quite different from what we’ve heard.” – Chris LingMortgage Manager at NerdWallet

Resources to Help Millennial Homebuyers:

There are some realities that are undoubtedly restricting to new homebuyers. However, we don’t believe that a lack of access to knowledge and resources should be one! Here are our picks to help you get on the path to home ownership:

Less-than-excellent credit options: Federal Housing Administration loans. They work with applicants who have lower credit scores and small down payments. With anticipated demand from millennials some are offering conventional loans with 97% financing.

A mortgage calculator can help you research monthly payments, while a real-life affordability tool can help you determine how much house you can afford.

If you are struggling with student loan debt, you may qualify for income-based repayment options or even refinance your loan(s) for a lower debt-to-income ratio.

Good Luck!

Whatever your challenge is, the wall to get over may not be as high as many millennials perceive them to be. Low savings or poor credit might seem impossible to overcome, but there are a variety of resources available to help today’s millennials get on the path to a new home.

If you are looking to buy a home and need some help navigating the process, get in touch with us at The Core Group.

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Footnotes:
1. Population and household counts are from the U.S. Census Bureau’s most recent American Community Survey and American Housing Survey. Independent households include homeowners and renters.
2. Based on median weekly earnings in 2015 from the U.S. Bureau of Labor Statistics.
3. Data on first-time homebuyers are from the 2015 National Association of Realtors Profile of Home Buyers and Sellers. Historical median ages are from Zillow.
4. This is based on the percentage of millennials who were younger than 30 years old as of the last American Community Survey.
5. Housing projections calculated by Harvard University’s Joint Center for Housing Studies in the State of the Nation’s Housing 2015.
6. Data are from a 2015 Zillow report on first-time homebuyers.

Are You Wondering What It Takes To Buy Your First Home?

There are many people sitting on the sidelines trying to decide if they should purchase a home or sign a rental lease. Some might wonder if it makes sense to purchase a house before they are married and have a family. Others may think they are too young. And still others might think their current income would never enable them to qualify for a mortgage.

We want to share what the typical first time homebuyer actually looks like based on the National Association of REALTORS most recent Profile of Home Buyers & Sellers. Here are some interesting revelations on the first time buyer:

First-time buyers race to qualify for $8K federal tax credit

LOS ANGELES – Sept 10, 2009 – First-time homebuyers have just 12 weeks to find and close on a home to qualify for the $8,000 federal tax credit by Nov. 30 – before the Dec. 1, 2009, deadline.

Those just beginning the process will have to beat the average time it takes to buy a home, a challenge that real estate professionals can help buyers meet even though it’s taking longer today to close most transactions today, according to Realtor.com officials.

On average, first-time buyers search 12 weeks to find a home, while closing can take up to 60 days, depending on individual circumstances and local regulations.

Additionally, the tax credit has proved to be extremely popular this year: studies show that taking advantage of the first-time homebuyer’s federal tax credit and relevant state incentives is the most important reason motivating 10.8 percent of buyers today. In fact, approximately 1.14 million buyers have already filed for the credit. Many more are expected to file for the credit when income taxes are due April 2010.

Historically high affordability is a major factor driving first-time homebuyers today, a growing group that accounted for one third of all purchases in July 2009, according to a survey by the National Association of Realtors®.

NAR’s affordability index in July 2009 was 36.0 percentage points higher than July 2008. Under these conditions, the typical median-income family can allocate 15.8 percent of their gross income to mortgage payments, well below the traditional allowance of 25 percent. Interest rates, which play a major factor in affordability, remain low, and averaged 5.22 percent in July for a 30-year fixed rate loan.

Realtor.com President Errol Samuelson said, “The national median home today costs approximately $174,100. By moving quickly to find and close on a home by Nov. 30, first-time buyers qualifying for the $8,000 tax credit can actually purchase this same home for only $166,100, an almost 4.5 percent discount off of the price of a typical new home. Because affordability this year is at its highest level in 28 years, and the market offers an incredible selection of homes within reach of most first-time buyers, we expect their numbers to grow as they pursue this once-in-a-generation opportunity to become homeowners.”

He added that by combining the effective use of technology for information-gathering with expert advice from local Realtors, today’s first-time home buyers can beat the clock and use the $8,000 federal tax credit, along with any available state-level credits, to purchase a home before the Dec. 1 deadline.

“By moving quickly, being prepared to make decisions in the face of increased competition, and using the expertise of a real estate professional, first-time homebuyers can still close on time and qualify for the $8,000 federal tax credit,” Samuelson said.

POSTED BY JUSTIN.A.CORE AT 12:42 PM 0 COMMENTS