House-hunting usually begins with a dream, switches to watching shows on HGTV, and then moves to property sites such as Trulia and Zillow. That’s the fun part. What none of these places do is tell first-time buyers what they really need to know before taking the plunge.
#1. Save more money
Save up more than the down payment. Often, a first-time home buyer will live in a rental of one type or another, where the landlord takes care of such emergencies as leaky pipes under the sink, new filters for the furnace, running toilets, and the like. Don’t use all your spare cash for the down payment.
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#2. Rent and mortgage payments are not the same
A monthly mortgage payment isn’t the same as rent. Your total monthly payment will be more than just the principal and interest on your mortgage. It will include property taxes and insurance as well, and depending on where you live, you might also be paying monthly homeowners’ association dues.
#3. Pre-approval is better than pre-qualified
Don’t get pre-qualified for a loan. Get pre-approved instead. By issuing you a pre-approval letter, a lender has actually verified your financial picture and looked at your credit report. Pre-qualification might sound good to you, but since the lender hasn’t verified your financial status, the letter means little to a seller. A pre-approval letter is the gold standard.
#4. Real estate agents are your friend
Use a Realtor. One of the great things about buying a home in Philadelphia is that expertise is for sale, and retaining a Realtor sooner rather than later will save time and very probably money. Realtors are usually paid by the listing agent when the transaction closes, so you’re not looking at any upfront fees to pay your agent. Find one early on to help plot your strategy.
#5. Hold your horses on making purchases
Don’t buy stuff right away. Once you’ve been pre-approved and have made an offer on a home, it’s tempting to visit Best Buy or IKEA to accessorize your home. Avoid the temptation. Adding balances to your credit accounts alters your credit picture and could result in delaying the close or, worse, having the loan commitment cancelled.
The AGENT LADY has been helping Philadelphia first time home buyers for years and would love to help you as well. Please call 215-518-5193 for a personalized discussion to answer your questions and help you find a home.
About Agent Lady: Cherise Wynne is a leading real estate agent in Philadelphia, helping home buyers and sellers navigate the City of Brotherly Love, with a special focus on first time home buyers. To chat about getting started with your first time home buying experience, click here.
