New Buyers: Make Your First Time the Charm

Renters transitioning to first-time home buyers find it to be a major change. While today’s Florida real estate market has softened enough to provide buyers the luxury of selection, a buyers have new worries: Will the value of the new home hold up? Will you be able to sell when your needs change?

To minimize those concerns, buy smart. Easy as that, right?

If you invest in a home that meets your long-term needs — think at least 3-5 years — and keep the financial burden manageable, you stand a good chance of weathering whatever the market dishes out. Here are the Top 10 Steps to making that happen.

1. Look into the future. Big tax benefits come with homeownership, and it sure is nice to watch an investment in a home increase over the years rather than watch your rent balloon. But that doesn’t mean purchasing your first home is in the cards right now. Renting is prudent if you’re likely to relocate within a year or two, or your employment or income is unstable, or your credit needs work. If you decide you really are ready, conceptualize your needs in a few years, not just at this moment.

2. Prepare a budget. You, not a real estate agent, know what you can afford. To figure it out, start with a no-holds-barred examination of your current income and spending. What can you trim? Phone service? Dining out? Entertainment? Some practice can be helpful, too: Pretend you’re already making a big Florida mortgage payment each month, and get serious about budgeting. Save any extra money for a down payment.

3. Build a serious down payment. While no-money-down Florida home loans are widely available, using one burdens you with higher monthly payments. A down payment of 5-10 percent can really trim monthly costs, and getting up over the 20 percent threshold will generally exempt you from having to pay mortgage insurance.

4. Look for help. A number of programs exist strictly for first-time buyers looking to get into a home. Some are geared toward providing affordable housing for teachers, police officers or other public service providers and others to low-income buyers, and are broadly available. You won’t know what is out there to assist you unless you look.

5. Get your credit in order. Before shopping for a Florida home mortgage, find out where you stand in the eyes of lenders. A borrower with a poor credit history will be charged higher interest and offered fewer mortgage choices. Take about $45 and buy your credit scores and reports from the three major credit bureaus — you can do this at MyFICO.com.

6. Get pre-approval. You can present a much stronger offer to sellers (and spare yourself worry) by getting your Florida mortgage set up before you even start house hunting. With pre-approval, you’ve already applied for the loan and the lender has checked your credit and agreed to give you a home loan up to a certain dollar amount.

[Apply above, using our FREE FORM, to talk with a Florida mortgage broker about getting pre-approved and making sure you secure the lowest rates.]

7. Work with someone who’s on your side. When you’re interested in a house, don’t just call the real estate professionals listed on the for-sale signs. Those agents are obligated to get the highest price and best terms for sellers. Instead, ask friends for referrals to find a buyers’ agent or buyers’ broker. They are usually paid from commission that’s already been agreed to by the seller.

8. Check out some ‘hoods. You can change a lot of things about a home, but a neighborhood is a different matter. When you’ve selected an areas, drive and walk around it to get a sense of what life may be like there. Pay a visit after dark and on the weekend to see if the character changes. Ask residents about a homeowners association and inquire into particular rules or nuances that might affect you.

9. Learn the art of negotiation. Once you’ve found a place you want, angle for a deal that works for you. Price is always the biggest negotiating issue, but there are others. Will the sellers pay points on your Florida home loan so you can snare a lower interest rate? Or will they pay some closing costs? Hammer out contingency clauses such as a home inspection contingency, and an appraisal contingency. Be strong.

10. Settle in, settle down. Congrats! Now that you’re the new owner of your very own home, prepare for a sudden obsession with Home Depot. No more calling the super if the faucet leaks and no landlord telling you what cant and can’t go on the walls. Enjoy… but mind that budget. You don’t want to be shaken up by financial surprises — if you use a Florida mortgage option that adjusts, consider refinancing before your payments rise!