Tips for First Time Home Buyers

Buying your first home is a major decision, but many of the common challenges first time home buyers face can be reduced or even completely avoided with some basic know-how. Here are some helpful tips for first time home buyers in the Frisco, McKinney and North Dallas markets by the experts at The Jan Richey Team.

If you’re ready to buy a first home and start looking for your dream home, contact The Jan Richey Team at 972-742-0177 and get started today.

What Costs and Hurdles to Expect

In many cases, a mortgage payment including property taxes and homeowners insurance can be less than what you pay in rent. The tax savings generated by the interest deduction (which constitute most of the payment in the early years of a mortgage) may keep the monthly cost slightly more than rent. However, you will be building equity with each payment.

Often, the biggest hurdle in the first-time purchase is cash available for the down payment and your closing costs. But even this obstacle is not insurmountable. If you are a veteran, you may be able to obtain 100% financing through a VA loan and many lenders offer 95% financing based on your credit rating.

Try to Pre-qualify For a Loan (If Necessary)

If your income enables you to qualify for the necessary mortgage loan, you may be able to negotiate a contract in which the seller pays your purchase closing costs and adjusts the price upward so that you, in effect, finance your closing costs. But the loan appraisal will still need to support this higher value in order for the loan to close.

A good place to start the entire process is to visit with a local lender to “pre-qualify” and establish your maximum loan amount. This loan maximum, coupled with your available cash, will determine the price range in which you should look. The lender will also provide you with a list of items required to begin the loan application process. We can provide you with lender referrals if needed.

As a first-time buyer, professional real estate assistance is crucial. We will work for you as a “buyer’s agent” in order to be your advocate in the transaction. In most cases, we will be paid out of the seller’s commission paid at closing, so you will not pay extra to be represented us.

Find the Best Type of Real Estate to Suit You

One of the most important tips for first time home buyers and to take time considering what it is your really want, and what makes most sense for your finances, living situation and future goals. We will be able to help you evaluate the pros and cons of purchasing a single family home, condominium, or townhouse and what the various types of ownership mean to you.

Other decisions can include;

  • Should you buy a resale home or new construction?
  • What kinds of inspections or warranties should you seek?
  • When making an offer, how much below listing price should you offer?
  • How does the price compare to similar homes on the market? Are you negotiating terms and other costs (home warranty, for example) as well as price?
  • What do you do if inspections uncover needed repairs?
  • Are there any factors related to the house or neighborhood which could create resale problems?
  • What closing costs are considered typical?

Here’s a good guide to the home buying process >>

Use A Licensed Real Estate Agent 

In what is usually an emotional decision, you need the counsel of a reputable, knowledgeable professional real estate agent who can help you buy wisely.

When shopping for a mortgage, look at the overall cost, not just the interest rate. Generally speaking, the higher the rate, the lower the number of points charged. Make sure you understand any hidden costs or special early payment penalties which could create problems for you. Look at different mortgage products, such as shorter-term fixed-rate loans or adjustable rate loans, but be sure you understand what your “worst case scenario” is if interest rates rise.

Once you have settled on a community and seen several homes, you will be ready to make an offer on a home you like. If you and the seller, with our negotiating assistance, come to terms and you execute a sales contract, you will then finalize your mortgage and move toward closing.

The Jan Richey Team members are Texas-licensed real estate agents and Realtors based in Frisco, TX with over 120 years of experience with both buyers and sellers in North Dallas. Real estate markets have fluctuated, housing prices have popped up and dropped down, and just as with the market itself, many real estate agents have come and gone in the past years. The Jan Richey Team–ranked among the top 1% of Dallas real estate agents by D Magazine for over 14 years–have proven that professionalism, integrity, and results-driven organization are qualities that are here to stay.