Are you thinking about buying a home in 2015? You are not alone! More than half of all Millennials (ages 18-34) plan on purchasing a home in next 5 years.
2015 is proving to be a great year to purchase a home. Mortgage rates are still near historic lows under 4%, but most experts expect the rates to rise throughout the year. Inventory is increasing, making finding your dream home easier than in the past 9 years. Home prices are expected to rise between 4% and 5% in the next year, so now is the time to get the best bang for your buck!
Here are the 3 Steps to Take When Purchasing Your First Home
1. Get Your Credit in Check
First, you need to make sure that your credit report is accurate. Everyone is entitled to one free copy of your credit report every 12 months. There are many companies that advertise free credit reports, only to charge you after a brief trial period, but annualcreditreport.com is the only site authorized by the FTC to provide completely free credit reports.
Also, now is not the time to start opening new lines of credit, or making large purchases such as a new car.
2. Calculate How Much Home You Can Afford
There are many online calculators that can help you determine how much home you can afford. You may want to calculate this amount, but use your own judgement on how much you actually want to spend on your mortgage, insurance and taxes each month. A good calculator can be found Here.
3. Assemble Your Real Estate Team
The next important step is finding the right professionals to help you achieve your goal of home ownership. It's important to find a mortgage lender that you trust and get pre-approved for a loan. Getting pre-approved will help you choose properties and make it easy to put in an offer when you find the perfect home. Also, find a Realtor that will act as your buyer agent. A buyer agent works on your behalf to help you find and tour homes, negotiate prices and conditions, and handle paperwork. It's important to have a buyer agent because the listing agent only has a duty to the seller and their best interests. Your buyer agent has a duty to you, but their payment comes from the seller!
Your buyers agent and your mortgage lender will work together to make finding your perfect home a reality! Your buyer agent can direct you to local programs that assist people in making home purchases.
There are free classes and services available to help get you into your first home. If you are intersted in purchasing your first home, contact me today to find out about the programs in your area!
Realtor, Coldwell Banker Schmidt Petoskey