Finance

6 Tips for First-Time Homebuyers

Planning to buy your first home this summer? Here are 6 tips to help first-time homebuyers navigate the sizzling real estate market.

Kallee Feuz Jun 11, 2018

The residential real estate market is sizzling like the summer sun. And the heated housing competition may be particularly challenging for first-time homebuyers who lack mortgage experience and existing home equity.

If you are among the 35 percent of homebuyers who are ready to take the plunge into home ownership for the first time, here are six tips to help you buy your first house:

First-Time Homebuyer Tip No. 1: Take a deep dive into your personal finances.

While there may be a strong emotional component to choosing a house, your home search should be grounded in reason and real-life numbers. Rather than relying on how much a bank is willing to lend, do your own math to figure out how a mortgage will fit into your budget.

 

Before you pore over for-sale listings, take stock of your finances, including how much money you bring in each month and how much you pay out. Don’t forget to factor in expenses you will add once you become a homeowner, like property taxes and homeowner association fees. Setting a budget early on will save you time and possible disappointment down the road.

 

Try a home loan calculator like this one to calculate monthly mortgage payments.

First-Time Homebuyer Tip No. 2: Shop loans before homes.

As important as the house you choose is how you choose to finance that home. After all, the mortgage loan you select will impact your family finances for years to come. Getting preapproved for a mortgage will put you in a stronger position to make an offer when the right home for you comes along. And since interest rates and fees can vary greatly among lenders, shopping for a home mortgage before you hit the open houses will also give you time to find the best loan terms. 

First-Time Homebuyer Tip No. 3: Understand various mortgage options.

Like houses, mortgage loans come in a variety of configurations, each designed to meet the differing needs of home buyers. While the 30-year conventional, fixed-rate mortgage is the most popular, plenty of other options exist, including loans with shorter terms (10-,15- and 20-year loans), adjustable interest rates (ARM loans) and government backing (FHA, VA and USDA loans). 

First-Time Homebuyer Tip No. 4: Take advantage of available resources.

The federal government offers loans programs and resources to help make home ownership more attainable for first-time buyers and other groups. Loans guaranteed by the government and issued through private lenders can help you get into your first home without a large up-front deposit.

 

Loans backed by Federal Housing Administration (FHA), Veterans Administration (VA), or U.S. Department of Agriculture (USDA) offer low out-of-pocket costs. For further information on federal and local assistance programs, check with the U.S. Department of Housing and Urban Development (HUD). Utah-specific information can be found here and Idaho-focused programs can be found here.

First-Time Homebuyer Tip No. 5: Look beyond the superficial.

Don’t get taken by the stylish furniture and the latest appliances in a well-staged home. The cosmetic touches may distract you from more important issues like repair needs or structural problems. Tilted door frames, for example, could suggest a sinking foundation; uneven tile may indicate a poor do-it-yourself job; and a weathered roof might mean a costly roof replacement in the near future. 

First-Time Homebuyer Tip No. 6: Calculate the true cost of home ownership.

When it comes to the price of home ownership, your monthly mortgage payment is just the tip of the iceberg. Remember to factor in utility bills, taxes, homeowner’s insurance, possible homeowners’ association fees, upkeep and repairs. As a first-time homebuyer, you may need to budget for items you didn’t need in a rental like a lawn mower and additional furniture.

 

For more home loan advice, contact a Zions Bank mortgage loan officer, who can help you find the right mortgage for you. Zions Bank takes pride in serving local communities and making home loan decisions locally. You can find additional home loan resources at the Zions Bank Homeowner’s Café.

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