Your home is one of your most prized possessions. For the first time home buyers in Maryland, this article can prove to be very informative and useful. If you are one of the first time buyers, then there are certain important aspects which you need to take care of. The fact of the matter is that your home is the most precious asset of yours. You must have dreamt of having a dream home for a long time and did all you could do to get hold of the required fund. Now that you are ready to get one, you need to be sure that you have taken the right decision and have made every single penny of your worth.
What do the First Time Home Buyers need to know?
As someone who is looking to buy a home for the first time in Maryland Region, there are certain important aspects which you need to take into consideration. Here are a couple of useful tips which you might find to be useful.
- Buyer’s Agent: Most of the times, people are reluctant to opt for a buyer’s agent. One of the reasons is their lack of understanding of how an agent operates in the entire process. An agent plays a significant role in the whole episode. He has the experience and is aware of the ins and outs of the entire fraternity. It is an agent who would help you to narrow your search down based on your budget, locality, and other preferences. Once you deploy an agent, he would be obliged to represent you legally.
One of the most important reasons as to why you should opt for an agent is because he would make this entire process hassle-free for you. It would be his responsibility to negotiate the contracts and facilitate the entire process of home buying for you. When it comes to buying a new home, it involves lots of steps and processes like arranging for a packer and mover, fixing an attorney, arranging for the inspectors and others. It is your agent, who would take care of the entire arrangement for you. An agent is indispensable for to this entire process.
- Mortgage Professional: When it comes to acquiring a new home, it can be a daunting and stressful endeavor. However, things can turn out to be a bit easy for you if you have an experienced and competent mortgage broker by your side. The main responsibility of the broker would be to assist you with different types of financial matters, especially the one pertaining to loans. He would educate and guide you about the different kinds of loans to can have access to. These are very vital and pertinent information to have when you are planning to buy a new home. Once you are armed with all the required information, the thing would turn out to be far easier for you.
Ideally, it is your agent who should arrange for a reputed and experienced mortgage broker for you. One of the primary duties of the broker is to investigate your financial background and ensure that you are looking for a new property within a price range that would suit you. There is another important reason as to why a mortgage broker is important. You can acquire a pre-approval letter from him. This letter would help you to avoid disqualifications at the last minute.
- Find your Dream Home: it sounds easy to go out and find your dream home. However, there are a couple of blunders which you are likely to commit to being a first-time buyer. With the image of your dream home in your mind, you would think of finding the “perfect home”. However, as a first-timer, you must understand that finding a “perfect home” can be very difficult. This is particularly true if you have a budget constraint.
There isn’t any checklist available which would help you in finding your dream home. It’s all about your imagination and vision. Besides, you should also have the ability to improvise and make use of the property to good effect.
- Go for a Contract: This is another reason as to why it is absolutely essential to have a buyer’s agent, especially if you are one of the first time home buyers in Maryland. The agent can run a thorough search of the market, particularly in the region where your home is located at. This means that they would carry out extensive research on the existing market price of the home in that area.
With this information under your belt, you can easily decide on the amount you wish to offer for the property. While buying a home, it is very important to have good negotiating skills. In case of certain new buyers, they expect to get a discount of a certain percentage out of the quoted price, which is not always realistic. If the price of the property is reasonable in terms of the existing market price, in that case, there are virtually no chances of negotiation.
- Hiring an Inspector: When it comes to buying a new home, a full and thorough inspection needs to be carried out. Inspection at times can be quite expensive; however, it is worthwhile spending that amount of money. A property can look to be very attractive and appealing at the first go; however, there can be numerous underlying issues which might cause you serious concerns in the days to come. In order to avoid such unnecessary stress, it is absolutely imperative that you carried out a proper inspection before finalizing the deal.
If any serious issues surface during the inspection, then the agent of the buyer can push the seller to fix them before closing the deal. If the issues are complex and too much time to consume to be fixed quickly, in that case, you should consider yourself to be lucky. Being a new buyer, it can be difficult for you to get hold of an experienced and reputed inspector. Your agent would help you find one.
Arranging Finance for the First Time Home Buyers In Maryland
While purchasing a new home, there can be numerous obstacles one may have to encounter, especially the new buyers. If you are applying for a mortgage in Maryland, then there are certain factors which you need to be aware of. Basically, there are four of them.
- Collateral: In case of purchasing a home for the first time, there isn’t too much collateral to be worried about. Typically, the price of the home would be on par with the market value; therefore, there is very little collateral one needs to deal with. It is the lender who has an increased risk in the entire transaction.
- Capacity: This basically signifies the ability of the buyer to repay the mortgage. Determining the debt-income ratio is the first step in this process. All the monthly debts will be taken into consideration and they will be divided by the monthly income of the borrower in order to determine the debt to income ratio. The job history of the borrower is also looked at while determining the capacity. It is seen whether the buyer is a frequent hoper from one job to another or not. If he is, in that case, he could be a high-risk candidate.
- Capital: The liquid asset of the borrower is also taken into consideration. Various factors like stocks, I.R.A, bonds, savings and checking account balances are being looked into while determining the capital. The sum total of these accounts is known as reserves. In case of standard mortgage lending, six months reserve has become a standard.
- Character: Prior mortgage history plays a major role in determining your chances of obtaining one. Since you are a first-time buyer, you are a spot of bother as there are no background data to check with. In that case, it is your rental history that would be taken into account. It is your credit history that would be extensively scrutinized in order to determine your character.
What to Look for?
If you are buying for the first time, in that case, it can be a bit tricky for you to figure out the ideal home for you in Maryland, as there are so many different options available. However, if you have a clear picture in your mind as to how your dream home should look like and what the ideal location should be, in that case, things can be a bit easier for you.
- Location: This is the most important aspect which you need to take into consideration while looking for a new home. What sort of location are you looking for? Do you prefer a buzzing and happening neighborhood or would you like it to be quiet and peaceful? It all depends on your taste and preferences. Besides, you should also take into consideration whether you have easy and quick access to all the basic services.
- Size: In terms of the size of the property, it is all about your budget and taste. If you are looking for a relatively bigger house, then you should have enough budgets to fit into it. On the other hand, if you feel that an average sized house would suffice in that case you need to make sure that it is big enough to accommodate you and your family.
- Price: You need to be very careful while finalizing the deal. Make sure that you aren’t paying more than what it deserves. Therefore, it is very important to have a clear idea and understanding of the existing market price in that locality. Your agent can play an important role in this regard to help you find the best rate.
- Condition: Even if a house meets the aforementioned criterion, it is not enough to put money on it. You would be investing a huge amount of money and in some cases; it could be your life time-saving. Therefore make sure that the property is in perfect shape in terms of its conditions and you would have to invest virtually nothing on the renovation. The best way to assess the condition of the house is by engaging a civil engineer, who would instantly spot any defects if there are any.
- Legalities: This is another significant aspect which needs to be taken care of. When it comes to purchasing a new house, there are various legal formalities and obligations that need to be met. Therefore, it is very important to make sure that you have an attorney who specializes in real estate dealings and would facilitate the process of the transaction for you.
5 Important Tips for First Time Home Buyers In Maryland
If you are searching for a new house in Maryland and this is your first time, then here are a couple of useful tips for you, which you might find handy.
- Think about the Future: If you are looking for a new home which would match your taste and preferences, in that case, it is absolutely essential for you to take into consideration your future. Remember, it is not only a financial investment, but at the same time a commitment of time as well. Ideally, you would want to spend the rest of your life in your house for years to come.
At present, you might have a small family, which can encourage you to go to a cottage or something small and cute. However, in the future, if you have kids, in that case, it is not going to suffice. You must have enough provision to accommodate additional members of your family you are most likely to join in.
Your present lifestyle and how it might change in the days to come is an important consideration that needs to be made while purchasing a new house. Always remember that it is a long-term investment, therefore you need to be very careful and the same time wise while selecting one.
- Realtor: Selecting a good and an experienced realtor is perhaps the most crucial step in the entire process. A reputed and experienced real estate agent can make things fairly easy for you. These agents are the professionals who know what exactly you are looking for in terms of location, design, and budget.
The real estate agents are particularly important in the case of first-time purchasers. Some of them offer special packages for the first timers by offering special discounts on down payments, special mortgage programs, and tax credits. Some of them even offer cash back rebate to the buyers.
- The Mortgage Type: What kind of price range you can afford depends on various factors like your debt to income ratio, your credit score. You need to know your budget from the perspective of the lender so that you are not wasting your time on properties which do not fit the lender’s criteria as well as your budget. This is where a seasoned realtor comes into the picture. He can assist you with the process of mortgage pre-qualification, which would make you ready to place your offer on the property and at the same time would enable you to get hold of a loan and close the deal successfully.
There are certain real estate markets where an offer would not even be considered by the seller if the buyer doesn’t have a pre-qualified certificate which is to be provided by a lender. A realtor, who is usually affiliated with different lenders, can help you acquire a pre-qualifier. Moreover, you will be also in a position to negotiate in the selling price of the property.
- Other Expenses: There are other expenses which need to be taken into consideration along with the monthly payment for your home. As a first time buyer, you might not have thought through it. While preparing the budget, it is important to prepare a list of all the different types of expenses which you might have to incur in the form of repairing and maintenance.
For instance, you might have to make sure that your yard is maintained as per the standards set by the homeowners association. This would mean that you will have to invest a considerable amount of money on lawn maintenance. Besides, there are other recurring expenses like the gas bill, electricity bill and others should also be taken into consideration.
- Resale Value: While purchasing a new house it is always very important to consider the resale value of the property. There are numerous factors that determine your property’s resale value, like the location, age of the building, its current price and etc.
This is where an experienced realtor comes into the picture. He would be well versed with the area’s resale value and would suggest you the best deal. It is very important that you considered this particular aspect carefully, as it would ensure that you have a fair amount of value to back you up.
Mistakes you must avoid
As a new buyer, you are likely to make some mistakes while deciding on your new home in Maryland. The fact that it is your first time as a buyer, you could allow your impulse to get the better of your senses. You must be very careful while making your choices. There are a couple of common mistakes which you are likely to make as a new buyer. Here are some of them which you avoid.
- Impulsive Buying: While buying a new house, there are chances that your excitement and greed overpower you. This is what triggers impulsive buying, which can be quite fatal in certain cases. You must make sure that you didn’t take a decision by having a look at one property. You can get attracted by setting your eyes on it, but you never know, there could be far better options that are waiting for you!
Do not ever get tempted by the pictures. This is one big mistake widespread with the new buyers. Before deciding, make sure that you had a physically been to the property and carried out a thorough investigation. There is no problem in going with the property you have set eyes on; however, it is important to ensure that you have made the right choice. This can only be done by following certain steps which have already been mentioned.
- Being too choosy: You must realize that there is no end to it!!! The more you look, the more you would get confused as there are so many options available to you. Like impulsive buying, being too choosy is equally harmful as you might end up taking a wrong decision. In order to pick the right house, you must have a clear picture in your mind as to what exactly you are looking for.
- Exceeding your Budget: This is another common mistake made by the new buyers. You get so mesmerized by a property that you might not hesitate to go beyond your budget. You might be able to arrange for the required funds and eventually acquire the property; however, it is important for you to remember that the extra burden of loan which you had to arrange for in order to get hold of the required funds can bring down severe financial crisis on you in the days to come. Therefore, it is essential that you stuck to your budget, a slight deviation is always welcome; however, it shouldn’t be alarming.
As a new buyer in Maryland, you need to be very cautious and cannot afford to make any mistakes. Thankfully, there are resources available to you which would help to facilitate the entire process, starting from a search of a new home to finalizing the deal. All you need to do is to follow the set path and use your common sense to make the right decision.
Being a first-time buyer, you are likely to face many challenges, but there is nothing to worry about, as you have some of the best service providers to assist you in every possible manner. So, if you are one of the first time home buyers in Maryland, all you need to do is to allow the experts to take charges and as far as you are concerned, you just need to arrange for funds and take the final call.