8 Ways to Act Like a 2nd-Time Homebuyer the First Time You Buy

The first time you do anything, whether it’s riding a bike or buying a house, you’re not likely to do it perfectly. Everyone makes a few mistakes when they are novices, but if you pay attention to people who have gone through the first-time homebuyer experience before you, it’s possible to avoid some common errors:

1. Check Your Credit Sooner Rather Than Later

If you wait until you are ready to buy a home, you may find out the hard way that your credit is not good enough to qualify for a home loan. Correcting errors or boosting your score can take months, so make sure you give yourself time.


2. Ask About Future Plans for the Neighborhood

When you are narrowing down your choices you need to be aware that communities change over time. If you buy a home because it faces green space, you will be disappointed if a few months after you move in that land gets turned over to start construction on a high-rise.


3. Keep Back Some Cash

You may feel great about being able to make a 20% down payment, but you should be sure you also have an emergency fund with at least three to six months of expenses and a fund for repairs and maintenance. Owning a home means you are responsible when things go wrong.


4. Don’t Borrow Too Much
 
If there’s one big lesson that everyone should have learned from the housing crisis and the recession it’s this: It’s better to take on less debt rather than more. A lender will tell you what you qualify to borrow, but you should be the one to decide what you can comfortably afford to borrow given your other financial goals.

 
5. Look at the Community at Night, in the Daytime and on Weekends

Most people want to live where there are other people with similar interests and lifestyles, and the only way to find out what local life is like is to test it out. What seems like a quaint and quiet neighborhood on weekday mornings could become a commuters’ nightmare at rush hour or party central at 2 a.m.


6. Choose the Right Loan 

While you may be focused most on interest rates and wanting to get your home paid off as fast as possible, taking on the shortest term loan or grabbing an adjustable rate mortgage isn’t always the best plan. If you can easily afford the payments on a 15-year loan, go for it; but if it’s a stretch, then go with a 20 or 30-year loan and make extra payments toward your principal when you can. An ARM can be a good option for borrowers who will pay off their loan before it adjusts, but it can be risky if interest rates rise.


7. Talk to the Neighbors
 
One of the best ways to find out about an area and a specific home is to chat with people who live in the community. Ask about crime, schools, noise, amenities, and if they know anything about the house you are thinking of buying.


8. Think About Selling Before You Buy
The features that you love in a home are likely to attract someone else someday when you’re ready to sell, but there are some factors that can hurt a home’s future resale value. If a community has mostly homes with three bathrooms and the one you want only has two, it could mean your place will be a tough sell someday. On the flip side, buying a $1 million home in an area with $400,000 homes can be equally hard to pass on to new owners in the future.
Whether you are a first-time or second-time buyer, taking the time to educate yourself on your local market and being smart about your finances can help you make the decision of a more experienced buyer.

 http://www.realtor.com/advice/8-ways-act-like-second-time-homebuyer-first-time-buy/