Advice for first time home buyers is available from a wide variety of sources, but which advice should you trust? Ed Craine, author and mortgage expert, provides reliable and timely advice for people thinking about buying their first home in this exclusive LoveToKnow Mortgage interview.
Where should first time homebuyers look for advice?
First time homebuyers should first find a reputable, experienced REALTOR® and a Mortgage Broker who specializes in working with first time home buyers. Buying a home can be a daunting task, so arming yourself with experts in the arena will prove invaluable.
What is the best advice for first time home buyers?
Go see a lot of properties. Weigh your options carefully, and don't be afraid to ask a lot of questions. Doing so will ensure that you don't make a hasty decision that you may wind up regretting.
Keep your cool when negotiating. There is always another train coming. Be prepared for bumps and hurdles along the way.
What is the worst advice for first time home buyers?
The much overused phrase, "Now is the best time to buy" is the worst advice a first time home buyer can take. The truth is, it may not be the best time to buy. I'd be very skeptical of anyone who makes such a claim. If you hear this from anyone, don't be afraid to challenge it. Ask why it's the best time for you to buy given your personal circumstances.
Should first time homebuyers use a real estate agent?
Absolutely! A first time home buyer needs the negotiating expertise that a REALTOR® provides. This is huge investment you're making, and you need to make sure that you're getting a good deal. Moreover, REALTORS® will do a lot of the legwork in finding your home for you, saving you hours of time trekking from open house to open house. REALTORS® will also help you with the intricacies involved in a purchase transaction, and often will have great referrals for you to people you may need such as contractors, moving companies, et cetera.
Should first time homebuyers get preapproved for a mortgage before finding a home?
Yes, this is an absolute must. Getting preapproved will allow you to know what you can afford so as not to waste time looking at properties outside of your price range. Your preapproval also lets the sellers know that they should take you seriously. Of course, being preapproved also gives you more leverage in negotiations.
How much of a down payment should first time homebuyers provide?
The amount of your down payment will depend upon your unique circumstances. That is, there is no one figure that is right for everyone. By working with an experienced mortgage broker, you'll get good advice on how much you need to put down on a home to ensure that you can afford your monthly mortgage payments.
How should first time homebuyers pick a lender?
Get a referral if you can. Interview multiple lenders and ask lots of questions about their experience, how they work, how they get paid, and how they communicate. You simply can't ask too many questions. Again, this is a big investment, and you need to make sure you're comfortable with the lender you're working with.
What advice do you have for first time homebuyers regarding home inspections?
Get them! Understand them! Even if the seller provides you with a home inspection, you should consider ordering your own.
Who qualifies as a first time home buyer?
A person who has never owned a home certainly qualifies. In some cases, with new laws, first time home buyers are buyers who haven't purchased a home in several years. Your mortgage broker will let you know if you qualify as a first time home buyer in your state.
About Ed Craine
Ed Craine is CEO of San Francisco based Smith Craine Finance, an award winning mortgage brokerage. Ed serves as an Executive Director for BNI, and is a contributing author to several NY Times Best Selling Books. Ed is also the publisher of Broker Banker Magazine.