TIPS FOR FIRST-TIME BUYERS By Madeline Jacobus As someone thinking of buying a home, you probably know how important it is to “do your homework.” But unlike when we were in school, there’s no teacher saying specifically what that homework should be. Clearly, understanding the process and asking the right questions can raise your comfort level significantly. The following is a guide for what to do, and expect, when buying your first home: 1. MAKE A BUDGET. Decide what you can afford to spend. Include monthly mortgage payments and other costs, such as taxes, insurance and home maintenance. Many new home sales representatives can calculate this figure for you very quickly. With today’s low interest rates and pricing, you may be surprised to find that you can own a home for less than you were paying for rent. 2. CHECK YOUR CREDIT HISTORY. A good credit history is important for securing a home loan. Many credit services provide one free report, so you can check your current credit status. It may be necessary to clear up bad credit before qualifying for a loan, but check with a loan officer, because you may qualify even with some history of bad credit. Also, try not to borrow for other major purchases until you’ve received the home loan, because most banks do a second credit check right before approval. 3. EXPECT PILES OF PAPERWORK. A loan specialist can often give you a financial critique of whether you qualify for a loan in about one hour. However, the actual loan process can take much longer. You may be asked to submit bank statements, pay stubs, tax forms, and other documents to prove your income and debt status, especially if you have few assets. Ask for a checklist of items to gather and begin collecting everything well in advance. Be prepared to be patient. 4. DON’T TAKE ‘NO’ FOR AN ANSWER. If one lender or builder turns you down, regroup with your home sales counselor to determine what it will take to qualify. You can either correct the problem and repackage your application, or look elsewhere. Other lenders may have different policies, or you may choose a less expensive home that may be easier to qualify for. 5. ‘QUALIFY’ THE BUILDER. Look into the builder’s history and reputation. Ask buyers who live in the community you’re considering what their experience was like. Would they recommend the community to their friends? Find out what is included in the warranty and what amenities come with the home. 6. SHOP THE COMPETITION BEFORE YOU BUY. Most home shoppers look at 45 to 100 models before they decide which home is right. You may want to use a spreadsheet to compare one community against another. Compare lot size, financing, timing, warranty, floorplans, cost per square foot, and other important aspects. Even if you’ve made an offer on your dream home, keep your eyes open. Continue visiting comparable communities. Your offer may not be accepted, and, if it is, you’ll have further knowledge of the market to convince yourself you’ve made the right choice. 7. GET TO KNOW THE SURROUNDING COMMUNITY. Does the surrounding area have convenient shopping, recreation, schools and parks? Visit the neighborhood at night and during the day. What is it like at odd hours? Drive your future commute to work. The local Chamber of Commerce can tell you what your neighborhood is like now. The local Planning Department can say what it’s likely to be like ten years from now, an important consideration if you’re planning to stay for a while. Most importantly, allow yourself plenty of time for your research. In the end, you’ll move into your new home with the secure feeling that only comes when you’ve made the right choice — for all the right reasons.