First Time Home Buyer Purchasing Plan

Many of the First Time Home Buyers we are talking to just want us to help them with a plan.  What makes sense to do during the 4 or 5 months prior to buying a house…  What kind of savings do you need, how do you figure out where you want to live, how do you get the best deal.

Although we are not Realtors, we work with dozens of first time home buyers in NC every month, and we know what will HELP you with your home purchase, and what will HURT you when you are trying to buy a home in NC.

Did you know that there’s still a Mortgage Tax Credit available for First Time Home Buyers in NC??  Well, you’re not alone, and as a First Time Home Buyer… it’s important to work with a company that offers the MCC and NCHFA programs, which we do.

It can cost you thousands of dollars, if you qualify for one of the special First Time Home Buyer Programs in NC – and your lender doesn’t even off it to you!

In addition to the special down payment assistance programs offered in NC, and the Mortgage Tax Credit  – you need to get a good handle on what kind of cost you will be facing, who can help you pay for the initial closing costs, and how we have to document those funds.

Another Program MANY of the loan officers in NC do not offer is the NC First Time Home Buyer GRANTS – which offer you 3% in no interest, no payment GRANTS! You can use these to cover down payment or closing costs, and can be used with a VA Loan, USDA Home Loan, FHA Loan or one of the new 3% down payment Conventional loans!

In general, the Seller can help pay for closing costs, however you will likely be responsible for your portion of the taxes, and your home owner’s insurance policy for the first year.  Most lenders require that you pay for the credit report and appraisal upfront, so if you want the seller to pay for those items – you will need to figure out how they can communicate with your lender to give them a credit card – or you will need to pay for those items, and then get reimbursed at closing.

First Time Home buyers also need to watch for a variety of conditions of the home factors as they get closer to actually buying their home.  Will you need to have extra money after closing to re-carpet?  Is the air conditioning unit on its last leg?  These are items that you need to review from the home inspection.   Sometimes an insurance policy can be taken out that will cover major appliances and systems for you.

If you’re looking for a house in NC, or plan to in the near future, here are some tips every first time home buyer should know:

1. Short sales that have not been pre-approved generally take much longer than foreclosures or standard sales to close… This is where your agent will be hugely helpful!
2. You should look at several houses before choosing one.  So don’t feel bad if you haven’t found the right one yet.
3. Before deciding against the house, make sure it’s because of large factors and not cosmetic issues, like pink walls in a bedroom.  Don’t be turned off by paint colors – but we do strongly suggest you look at WHERE the house is located. Is it on a busy street?
4. If you need to buy appliances for the house, look at how much cheaper it can be to operate Energy Star appliances.  Most places, like Lowe’s have that information available.
5. Don’t shy away from homes that are not in move-in condition.  A few weekends can add value – but if you are NOT the handy type – don’t bite off more than you already know you can do.
6. Compare homes in terms of how much you’re paying per square foot in homes that have similar features.  Remember that attic space, lofts, basements, and unfinished rooms are not calculated the same as finished bedrooms.  Your Realtor will give you the comparable sales in the area before you start figuring out what you’d like to offer.
7. Don’t place all damages on the same comparison level, for example a broken tile is far less serious than a leaking roof.  This is also important to remember when you have a Home Inspection done, it’s all relative.
8. Drive by the neighborhood at different times of the day and evening to understand the community and noise level.
9. Try to choose an area with good schools – this will come in handy even if you don’t have kids, when you are ready to sell it (of course, in Wake County that can be a moving target).
10. Get pre-approved first (not pre-qualified), so that when you’re ready to buy, the underwriting process is already underway
11. Keep in mind, in this market, there are fewer homes in the First Time Home Buyer price range.  In other price ranges, it might be easy to offer far less than the sales price, but in this market – you may have to offer MORE than the asking price to win your bid for your dream home!  Remember that if you are looking for a home that you can buy using the USDA Home Loan, no down payment option – the USDA Loan Eligibility Maps may be changing.
12. Take your digital camera along when you go to look at houses.  This will help when you are looking back and trying to compare one home to another… it can get confusing!

Call Steve and Eleanor Thorne, NC Mortgage Experts, 919-649-5058. If you are considering a home purchase in NC, and want information regarding First Time Home Buyer options, you can also Connect With Us on Facebook.