buying a home with little money in savings

First-Time Home-Buying Tips For A Smooth Purchasing Process

by Fernando Moore

Buying your first home is always a fun yet stressful time in life. Your first home represents independence and shows you have been working hard and saving your money to be able to make this big purchase.

If your bank account says it is near time to look for your first house, then these tips will help you start the process on the right foot

Tip: Get Pre-Approved for a Mortgage Loan

Unless you are fortunate enough to live in one of the areas of the country where houses cost about the same as a new car, you will probably need a mortgage loan. Typically, mortgage lenders require you to make a down payment of about 20% to avoid having to pay extra each month for private mortgage insurance (PMI). However, many lenders offer special first-time home buyer programs you can take advantage of.

Rather than waiting until you find a house you like to start the mortgage process, instead, get preapproved for a mortgage. Preapproval shows sellers you are a serious buyer who can obtain financing and close the deal. Additionally, preapproval will show you how much money you can spend on your first home.

Tip: Think Long and Hard About Where You Want to Live

Once you purchase a home, you will be stuck living where it is located for potentially many years. While this is fine if you buy a house in the right neighborhood, it can be a curse if you make the wrong decision. Since the last thing you want to do is discover your new neighborhood isn't very safe at night or the local schools are bad, think long and hard about where you want to purchase your first home. Rather than buying a larger home in a low-quality neighborhood, instead, consider the idea of buying a smaller home in a better area. Homes located near good schools, ample shopping, and lots of jobs come at a premium price, but they are higher priced for a good reason you should consider taking advantage of for your family.

Tip: Always Use a Buyer's Agent for Making a Purchase Offer

Finally, if you happen to tour an open house alone without a real estate agent, fall in love with the place, and decide you want to make an offer, then you must find an agent to represent you and write the purchase offer. A buyer's agent represents your best interests during the negotiation process and it is always best not to use the same agent as the seller is – even if they offer you a discount on their fee.

For more information on finding condos for sale, contact your local realtor.