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Tips for the First-Time Home Buyer Part 1 of 2

Mar 5, 2015

Purchasing a home can be a daunting task for many, especially if you are a first-time home buyer. With several months to go before summer, the peak season for home buying, PFCU has provided the following ten steps, which if done correctly can help to make the first-time home buying process a little bit easier to navigate. The first five steps are listed below - keep your eyes peeled for the second five coming later this month.

Step 1: Always begin by asking yourself, “What exactly do I want?” 

Any thorough process begins with research. Almost half of prospective first-time home buyers typically begin their formal home search six-to-twelve months in advance. When you decide you are ready to buy a home, start to watch the market and check listings. Make special note of changes in asking prices or houses that may stay on the market longer than usual, these could be questions to further inquire about if you find yourself interested in that particular home. By watching the market for some time it will help you gain valuable knowledge on the market trends in the area you are looking to move to.

Step 2: Set your budget, and stick to it.

When potential first-time home buyers see a house they like, their first question is often, “Can I afford it?” Better to do this calculation prior to beginning your search so you don’t waste your time looking at houses that are priced outside of what you can afford to pay. Professional lenders recommend looking for homes that cost within three-to-five times your household income. This recommendation is for individuals with moderate outside debt who are looking to place a 20 percent down payment. To gain a better understanding of how much you may be able to afford, check out the mortgage rate calculator on PFCU’s website or call the Mortgage Department at 215-934-3505 to speak to a PFCU mortgage professional.

Step 3: Compare mortgage options. 

Once you have decided on an amount that suits your budget, you can consider getting prequalified for the mortgage of your choice. PFCU makes this step easy with an online mortgage application for those interested in a pre-approved loan. Getting pre-approved for a mortgage not only removes one obstacle to negotiations, it also helps you narrow down a practical price range. For most first-time home buyers, purchasing a house is the largest expenditure of their lifetime. Yet a significant number of consumers don’t shop around enough to ensure they are receiving the mortgage that best fits their circumstances. There are endless variations on loan terms, rates and upfront costs on a mortgage, so it’s important to do your homework and weigh your options to determine which one is the best fit.

Step 4: Begin your hunt, with the help of an expert.

Finding the right real estate agent is an important step in the home buying process. Not only can the proper agent help you find your dream home, they often have insight into the areas or neighborhoods you may be looking to move to that the current homeowner may not immediately divulge. This is especially important when moving to a new city that you are completely unfamiliar with. Real estate agents may have insider knowledge on such factors as neighborhood safety and crime, school districts and noise level.

Step 5: Touring is key. 

Once you’ve identified a real estate agent to work with, it’s imperative that you go check out the houses in person. A lot can get diluted on a computer screen and even more so on a mobile device, so it’s important that you make an appointment to check out the property. There is a lot one can discover once there. Keep in mind that you’ll most likely be seeing quite a few homes, so don’t be afraid to take pictures or videos and make note of what properties they are from. Perform simple tests on important appliances such as turning on the shower to check water pressure and turning on and off light switches to test the electrical system. Opening and closing windows is also a good idea, as is checking to make sure all locks are fully functional to avoid maintenance charges and repairs right after you move in. If things like parking, low traffic activity or children playing are priorities to you, give yourself enough time to check out the entire neighborhood in addition to the house, and survey the scene.

Remember to check back in a few weeks to read First-Time Home Buyer Tips 6-10. In the meantime, consider attending one of PFCU’s upcoming Home Buying Seminars for more information:

Monday March 9th, 2015 at Whitman Branch Library
Thursday April 23rd, 2015 at Fishtown Branch Library
Tuesday May 19th, 2015 at Northeast Regional Library

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