First Time Home Buyer Confusion Buster!
If you are a first time home buyer you've got two things on your mind right now.
- First, you have the dream and the goal of owning your own Cape Coral real estate. Maybe you're family is about to grow or possibly you are just wanting to break out of the renter's rut. Renting can fit a certain lifestyle for a while, but there comes a day when living in such close quarters just isn't cutting it anymore.
- Second, you are wondering what you really need to know about making that all important first purchase. Maybe you've never followed the real estate market. Why would you? Now you are searching for answers and feel like you are taking a crash course in home buying 101.
If this sounds familiar, you've come to the right place. Are there certain things you need to know? Of course, but they may not be what you think. Many first time home buyers make the mistake of trying to understand real estate values and spend a lot of unnecessary time looking for the hidden, hot deals that might be out there, when they aren't even fully prepared to make their first home purchase. Those things should be left in the hands of your qualified real estate agent. Here is a list of the things you'll need to do before you begin your search for that perfect Cape Coral property.
First Time Home Buyer Checklist
- Get Your Credit in Order - Pull up your credit report (it's free online) from both major credit bureaus. Find out what your credit score is and check it for inaccuracies. Your credit score will play a big part in your ability to secure financing.
- Get Pre-approved - Once you are certain your credit score is accurate, it's time to contact your potential lender. Start with your bank. You'll want a letter of pre-approval. This is completely different than getting pre-qualified. Pre-approval is a guarantee that your lender will loan you a certain amount of money, just as long as the Cape Coral property you are looking to purchase appraises higher than the amount you are looking to borrow. Securing a pre-approval letter not only lets you know exactly what your home budget is, but it also will put you in the front of the line when it comes to bidding on a home. Often, a homeowner will accept a lower bid from a potential buyer who has pre-approval from their lender just because it's a sure thing. Another potential buyer may talk a good talk and offer a higher bid, but without pre-approval, there's no way the homeowner can be sure their loan will go through. Bottom line? Pre-approval gives you the upper hand.
- Get Your Finances in Order - The down payment and the closing costs are two expenses you will be expected to come up with upfront. To be safe, expect your down payment to be 10% of the entire loan, so a $100,000 Cape Coral property would need a $10,000 down payment. If you qualify for certain loans, your down payment could be as low as 3.5%, but the more you have tucked away, the more opportunities you will have.
- Make Your List - Before looking for a home, have a good idea of the size, the location, and the features you are looking for in your ideal home. Divide these into two columns. The Must Have Column could possibly include number of bedrooms, garage size, or proximity to shopping or activities. The other column should list extras you are looking for in your ideal home, but can live without. By committing a list to paper, you'll apt to be more rational when you start looking at homes and won't become easily confused.
By doing these things before contacting your real estate agent you will be a well prepared, serious buyer, and you will be able to make a quality decision based on cost, location, and features. You won't spend countless months window shopping for a home that you aren't even sure you can afford.
By bringing your list of specifications with you when you meet with your real estate agent there will be no question as to the home that is right for you. Your agent will be well equipped to find the perfect home at the lowest possible price, and since you are pre-approved your agent will be able to negotiate with confidence on great deals that have just hit the market.
If you are looking to purchase your first home, whether it is a Cape Coral waterfront home or another Cape Coral property, give us a call today. You'll be glad you did!