First Time Home Buyer

First Time Home Buyer Tips

First Time Home Buyers Tips
Financial Terms
Copyright 2007 Emerald Key Software
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Financial Terms
Category Construction Glossary
In order to make sure your home buying experience is a pleasant one
that results in a satisfying purchase, there are several things you need to
do.  These include:

Do your homework beforehand
• Hire an agent that represents you
• Don’t overextend your budget

If you follow these three rules of thumb, you should find a great house
that you can call home while also investing in a piece of real estate that
will result in a nice profit when it comes time to sell.

Do Your Homework Beforehand

As a first time home buyer, doing your homework beforehand mostly
involves looking at different house designs and getting a clearer idea of
the type of home you would like to buy.  Are there certain features that
you absolutely must have in the home that you buy?  Are you willing to
buy a fixer upper that you can change into your dream home over the
next several years?  Are you more interested in finding a place you can
call “home” or in a piece of real estate that will dramatically increase in
value over the next several years?

Don’t forget to also do research on the neighborhoods you are
considering moving to.  Factors you need to consider include the crime
rate, the school systems, the proximity of conveniences such as stores
and gas stations, and the quality of the property in the area.

As a
first time home buyer, having a clear idea of the type of home
you are looking to buy will help to narrow your focus when it comes time
to make the purchase.  Don’t be afraid to call a broker to show you
several different houses, either.  Just keep in mind that the realtor the
broker assigns to you is representing the seller.  Therefore, you should
only work with this agent to help you look at different pieces of real estate
so you can get a better idea of what you are looking for as a
first time
home buyer,

Hire an Agent that Represents You

Once you have utilized the services of a realtor to help you look at
different houses and determine the type of property you are looking for,
it is time to hire an agent to represent you.  With a buyer’s agent, you
can be certain the realtor is looking out for your best interest rather than
trying to close a sale for the seller.  In this way, you can rest assured that
the agent will be straightforward with you about the pros and cons of the
real estate you are considering purchasing.

Don’t Overextend Your Budget

As a first time home buyer, the amount of money you can afford to
spend on your home will depend on a number of factors.  Thankfully,
there are several Mortgage calculators online that will help you determine
how much you can expect to pay each month toward your home
depending on how much the home will cost.  So, sit down and take a look
at your monthly expenses in order to determine how much money you
have left over to pay toward your home.  Then, play around with the
calculators to determine how much the total cost of the home can be
while still fitting within your budget.

Keep in mind that you do not want all of your leftover money to go toward
a house payment.  After all, you will need extra cash to go toward
unexpected expenses as well as toward entertainment and other every
day expenses.  A genera rule of thumb is to keep all of your debts at less
than 45% of your total gross income per month.  Therefore, you can
follow these steps to give you an idea of how much you can afford per

1. Multiply your monthly gross income by 0.45
2. Subtract all of your debt payments from the resulting figure
3. Use this amount as a guideline for how much you can spend each
month toward your home purchase

As a
first time home buyer, if you stay within your budget when you
buy your home, you won’t have to worry about the possibility of losing the
home you always dreamed of having.  Similarly, by hiring a buyer’s agent
and doing your homework ahead of time, you will be certain to be
pleased with your purchase for years to come.