The prospect of buying a house can be scary for the first-time homebuyer. But, the prospect of not investing money in something of value and “throwing” it away on rent each month is even scarier for others. Baton Rouge was recently named as one place where it’s cheaper to buy than to rent. With a number of loan programs for first-time homebuyers and low interest rates, it’s still a great time to buy your first house.
Financial Advice
One of the first steps every first-time homebuyer should take is to talk with a lender. A lender will help you determine your budget. The lender will run your credit score and help you to identify which loan program may best fit your needs.
Many homebuyers still believe that you have to have a 20 percent down payment. Let’s be honest, not many people have that much cash sitting in the bank. There are a wide variety of loan programs available to a first-time homebuyer, ranging from zero percent down to over 10 percent down, with many first-time buyers choosing a 3.5 to 5 percent down payment.
A lender can also provide you with a good idea as to what your monthly payments will run, taking into account property taxes, insurance, and the loan amount. While you may qualify for a maximum loan of $250,000, you may decide to go with a house that costs less in order to keep your payments down. Let’s be honest, no one wants to be “house poor,” spending so much on your monthly payments and utilities that there’s no cash left at the end of the month for other fun stuff.
Find a “Matchmaker”
Once your budget has been set, it’s time to find the right “matchmaker” to help you find the right house. This matchmaker, a.k.a. a real estate agent, will walk you through the entire process of buying your house. So, it’s extremely important to find the right agent.
There are a number of ways to find your real estate agent. Asking family and friends for recommendations and attending open houses are two great ways to find an agent. Don’t forget to do your research. It’s important to find an agent who understands your wants, needs, and situation. Go through the agent’s social media sites and website to get a feel for who he/she is and what they do. Does the agent have experience working with a first-time homebuyer? Is the agent someone you like and can get along with? Whether it takes you a week or three months to find the right house, you will be talking often with your agent and spending time together. It’s important that you can get along.
Be Flexible
As you begin your search, know that no house will be perfect. There will be little quirks with almost every house you tour. Develop a list of the needs, wants, and desires you are looking for in your first house. Share that information with your real estate agent so that he/she can incorporate that into the search. As you look, be open to suggestions. You’re bound to see some interesting choices in paint color and decor, leaving you to question, “Why in the world did they do that?” But don’t be afraid to look past the “outer beauty” and see the true potential the house has to become your first home. For example, some changes to a house are rather simple fixes. Flooring, paint, countertops, etc., can be changed over time. The location cannot.
One thing to consider in the Baton Rouge area is whether or not you are interested in buying a house that flooded. In 2016, a number of houses were impacted by the historical flood. Many of these houses have been remodeled and updated with new kitchens, new bathrooms, new flooring, and more. These houses present a first-time homebuyer with an opportunity to purchase an updated house at an affordable price.
Don’t Wait for the “Perfect” Moment
When you find a house that truly interests you, don’t wait to make an offer. Buying in a tight housing market presents a unique set of challenges. Regardless of how long a house has been on the market, it is one offer away from going under contract. In Baton Rouge, it’s not uncommon for a house that is priced right to receive multiple offers within days of being listed.
Have Fun
Buying your first home shouldn’t be a chore. Sure, it can be a challenge and sometimes test your temper. But, at the end of the day, you’ll have a place to call all your own!
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