The Ultimate Home Buyer’s Guide
Buying a home is very rewarding. It’s an investment in your future. Whether you are a first-time buyer or a seasoned buyer, we can help. We know this purchase is a big deal and we will help you through the process.
What are the benefits of homeownership?
Homeownership brings many benefits. When you buy your first home, you’ll become part of a community and experience the security of owning the roof over your head.
As a homeowner, you may also be able to:
- Take control. Avoid rent increases and cancelled leases while creating a home that meets your needs and tastes.
- Build home equity. Grow your assets with the principal portion of your mortgage payments as your property value potentially increases.
- Get tax benefits. Deduct mortgage interest and real estate property taxes on your income tax returns. (Consult a tax advisor regarding the deductibility of interest.)
- Build your credit. Create a strong credit history by making on-time mortgage payments.
What should I consider before buying a home?
Homeownership is a serious and long-term commitment: financially, geographically, emotionally, and more.
Give careful thought to these factors as well:
- Financial responsibility. You’ll need to pay for utilities, maintenance, and repairs — on top of your mortgage payments, property taxes, and homeowners insurance.
- Potential risk. Real estate often increases in value over time, but not always. Your property value can also go down.
- Tighter ties. As a renter, you can pick up and move with short notice. When you own a home, selling it before moving on is more complicated.
Create a financial plan
Understand your credit needs and borrowing ability.
- Check your credit history and make a plan to get your credit in shape if necessary.
- Determine how much you can put toward a new home. The total amount you need is the sum of your down payment and closing costs.
- If your down payment is less than 20%, you’ll generally also need to get private mortgage insurance or PMI.
Assemble a good team
- Mortgage loan officer – A good mortgage broker will review all your document and offer the best loan for your needs. It is best to find someone who fits your needs: communication style, knowledge, and access to different mortgage products.
- A Real Estate Agent – While it’s easy to search for homes online today, many buyers will simply call the agent who has listed the home. This is not to your advantage.
Note that there are usually two agents involved in a transaction: one who represents the seller and one who represents the buyer. Each party should have their own representation. It’s impossible for one agent to represent both parties fairly.
Most of the time, having an agent as a buyer is at no direct cost to you because the agent is compensated from the seller-paid commission when you buy a home.
A licensed real estate agent may help you navigate the home buying transaction more smoothly.