- Know your finances:
It sounds obvious but it’s easy to overlook. “There are a few truly critical things to do and understand with personal finance and buying a home,” explains Keller Williams Newtown realtor Steven Masterson. “First, know your credit score. The higher your credit score the better. When preparing to buy a home there are some critical things to do. Second save cash. There are expenses from down payment, closing costs, inspections, moving, and furniture purchases just to name a few. Plus now you’ll have a mortgage.” Next, Masterson says sure you have no major credit pulls. “If you can, don’t buy a new car or finance expensive TVs or new furniture,” he adds. “So the basics here are save cash and protect your credit score. Do those two things and you’ll be ready to buy a home.”
- Don’t Just Start Looking:
Sure it’s easy to want to jump over the boring financial details of interest rates, points and approval questions and go touring gorgeous kitchens and spa bathrooms. But sometimes that’s just setting yourself up for disappointment. “I recommend that the first thing you do is not see a house. Meet with your realtor, or several — you are a consumer, and have a buyer’s consultation meeting. Here, you’ll learn about the buying process from your first showing to closing,” explains Masterson. Next he suggests focusing on getting your pre-approved from a lender. “”The worst thing your realtor can do for you is skip what I suggested, show you your dream home and you’re not ready to purchase it. What I mentioned above is my recipe for success. I have repeated it successfully numerous times.”
- Buy For Today:
A big question newlyweds often have is whether to buy a house for a future family or a more modest home that suits their immediate needs. Many experts agree it’s better to get into the real estate market for something affordable rather than wait until you can afford that mini-mansion. ”Who knows where the country will be with home prices and interest rates if you decide to hold out for a year or two? cautions Masterson. “This always comes down to need. If you need a home now, buy one now that suits your needs. If you are newly married, working professionals, and don’t plan to have children immediately, don’t buy your dream home with five bedrooms. Buy within your means and your investment may help fund your next home purchase.”
- Hot Markets Require a Little Fire:
Let’s face it, Philly, South Jersey, Lehigh Valley — there’s a lot of hot areas in the tri-state region. Masterson offers this advice for new buyers looking to get into those much-desired zip codes. “Be aggressive! When you find your home in that hot neighborhood you’ll have to offer at- or over asking price. Now, when I show a house and my clients immediately love it, that’s a sign there will be multiple offers.” He says In multiple offer situations buyers need to shine on a paper. “This is where your realtor comes in. Your offer needs to be professionally written, with strong deposits, and a reputable lender. I have also found that a personally written letter helps sway sellers.”
- Save, Save, Save:
A nice down payment savings account can make all the difference to getting the first home of your dreams. But there are other costs beyond just that chunk that goes toward the principle of the house. Masterson says there are many variables that will determine what you’ll actually need to save. He suggests talking to your lender about all the costs you might encounter (for example, a property inspection might set you back several hundred to a thousand dollars, and you might need more than one!). “Down payment will be greatly impacted by the type of loan you’ll be approved for – FHA, Conventional , VA etc. Remember, less down payment equals higher monthly mortgage and vice versa. Depending on area, closing costs can range from $6,000-12,000 and any potential seller assist will lower your closing costs. You’ll learn about all of this during your buyer’s consultation meeting mentioned above.
