Buying a home for the first time can seem intimidating, but with the right tools and knowledge you can get through the process without a great deal of stress. Here are three tips to consider during the home-buying experience to help you have a more successful and positive experience.
As a first-time home buyer, there are several different types of financing programs available to you. These programs are designed to offer such items as lower interest rates, a lower down payment, and lower closing costs to help you get into a home easier. For example, FHA loans provide financing for your first home with a down payment of only 3.5 percent of the purchase home's price as long as your credit score is 580 or higher.
You can also look to buy a home where the seller is willing to offer financing to you. This option allows the seller to act as the bank and you make payments to them, and is a good way to get into a home if your credit prevents you from being approved for a mortgage.
There are professional services you can use to help you through the buying process. When you hire a realtor, they will work with you to help you search for, negotiate the price, write the contract, and close on your home. As a buyer, you have their services for free, as their commission is paid by the seller's proceeds on the sale of the home.
When you hire a realtor, they have a legal and fiduciary duty to act in your behalf during the buying process. This protects you, as your realtor will be acting in your best interest and cannot keep pertinent information about the sale from you or put their gain before your own financial protection.
Rebates Available to You
When you have chosen to work with a realtor to help you during the buying process, you can look for a realtor who is willing to offer you a home buyer rebate. A rebate is essentially money you can get at closing to go for anything you want to use it for. Your realtor is traditionally paid three percent as their commission from the buyer and the home sale proceeds, which they can offer you a portion of as a rebate paid to you as cash at closing, which you can use for anything you want, including paying it toward closing costs.
For example, you buy a home and your realtor gets a three percent commission of $6,000. If they have offered you a rebate of one-half percent, you will receive $2,500 at closing. You can use that money, for example, to do repairs to your home, buy new appliances, or put it toward a vacation you want to take. Make sure you specify with your realtor that you can use the rebate for anything you want.
Use these tips to help you during your first-time home buying process.