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Home Purchase Tips for the First Time Buyer

While renting a home comes with numerous advantages such as no property maintenance and no property taxes, with the real estate market now being in favor of buyers, the number of people taking the opportunity to buy is on the rise. Being a homeowner also provides plenty of benefits to include building equity, creating the style based on personal preference, and becoming a part of a community. However, first time buyers wanting to make a home purchase generally have tons of questions.

Before making the leap from renting to buying, people need to consider a variety of things carefully to make sure this is the right decision but also that the best home purchase is made. The best step a person could take is by sitting down with a reputable lender to see if the loan would go through and if so, for how much. As a part of this process, experts recommend that first time buyers go through a preapproval process, which is different from pre-qualification.

A pre-qualification would involve the buyer going through several processes with the lender to determine if they could even qualify for a loan. Taking this one step better, the buyer could actually go through a preapproval. With this, the application is taken and processed as if the person had already found a home wanting to buy. However, if the loan is approved before house hunting, the first time buyer now has more negotiating power. The reason with the seller knowing the money is already approved and waiting to be handed over, the sale would be smooth sailing.

Another helpful tip regarding a home purchase has to do with location. No matter the price range, any prospective buyer should look at a number of different neighborhoods. Many communities look great at first but after buying, the new homeowner discovers they are in a high crime area or far from many of the conveniences that they want. Therefore, the first step would be to look at a variety of communities based on the budget. Of course, the goal is to buy a home in a neighborhood that the buyer loves, but also a home that has potential for building good equity.

Then, the decision for making a home purchase as a first time buyer is based on the price of the home but also maintenance expenses. Typically, a new homeowner would expect to pay approximately 1% of the purchase price of the home each year for maintenance. This would include caulking or glazing windows, repairing gutters, having the property treated for insects and pests, painting, and so on. Of course, the older the home the more a person would likely pay for upkeep.

The buyer would also need to determine the home purchase based on new versus older homes. Most often, a new home would come at a higher price range but initial maintenance costs would be low or nothing at all. New homes come with a warranty from the builder so every appliance, as well as the air conditioner, furnace, roof, windows, etc. are covered so if something were to go wrong within a specified amount of time, repairs would be covered.

Although older homes would not come with a builder’s warranty, if the first time buyer could find one in good condition, they would have the opportunity to buy a home with character and charm, something hard to find in a new home. Additionally, the price could easily be less for an older home. The bottom line is that first time buyers looking for a home purchase need to work with a qualified real estate agent and lender, and then consider location, age of home, budget, and other factors so they end up with an amazing home, one they can enjoy for years to come and a home that would increase in value.

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