Seattle Real Estate News

Some of the important steps to homeownership include:

• Getting approved for a mortgage.
• Choosing the right real estate agent.
• Finding the right home that fits your budget.

Here are 5 tips first-time homebuyers should avoid:

1. Budget.  Your monthly payment consists of principal, interest, property insurance, taxes, and homeowners association dues (if applicable). Keep in mind that here in King county, property taxes are not fixed and tend to go up every year. In addition, you have to incorporate property maintenance and utility bills into your monthly budget.
2. Looking for a home first and a loan later. Often, first-time homebuyers "are afraid to get Pre-Approved" for fear of denial or qualify for a loan smaller than expected. No real estate brokers (with any common sense) would show houses to first-time homebuyers without a solid Pre-Approval Letter.  Please consult me for your Pre- Approval letter.
3. Not getting professional help. You will need a reputable real-estate agent and a good mortgage broker (as a start). In general, first-time homebuyers will need a selling real estate broker (not a listing broker). A selling broker represents a homebuyer (you) and will only work for you (don't worry - you do not have to pay their commission since it will be paid by a home seller). If you hire an agent or loan officer without a referral from friends or family, ask the agent to provide references from previous buyers.
4. Using up savings on the down payment. I prefer if you put down 20% to avoid paying monthly mortgage insurance. However, spending all or most of your savings on the down payment and closing costs is one of the biggest mistakes first-time homebuyers make.  You can still put down less than 20% and not pay monthly mortgage insurance. It's crucially important that homeowners to have rainy day fund.
5. Violating any of these rules before the deal is closed. You found the house you wanted, the contract is signed and the closing is in 30 days. Don't celebrate by buying another big purchase on CREDIT. Lenders will re-pull credit reports before the closing to make sure the borrower's financial situation has not changed since the loan was approved. Any new loans on your credit report can jeopardize the closing.