The home-buying process can seem intimidating when you’ve never committed to such a big purchase. After all, owning a home comes with new responsibilities, monthly payments, insurance, taxes, and regular maintenance.
Take time on the front end to learn how to navigate the journey toward homeownership. You can save yourself from stressful moments and understand how your budget will be impacted over time. And remember that it is always advisable to partner with an experienced real estate agent who will address your concerns and work on your behalf. Continue reading to discover six things every first-time home buyer in North Phoenix should know.
1. Know your preferences
You can save time and energy if you make a list of your non-negotiables before launching a home search. These are items where you are unwilling to compromise. For example, you may only want to look at homes with four bedrooms or those with three-car garages or pools. With other home features, however, you may be more willing to compromise.
Do some research on the area, too. North Phoenix is situated among the Phoenix Mountains and is home to several private golf clubs. Upscale shopping centers, top-notch schools, and cultural spaces also populate the area. Prioritize what amenities you want to have within reach as you pinpoint ideal neighborhoods.
2. Choose an experienced real estate agent
As a new home buyer, one of your most critical early decisions is to choose a reputable real estate agent. Facing the real estate market alone can put you at a disadvantage concerning prices, timelines, and negotiations. Some sellers may not want to work with you unless you have professional representation.
When buying North Phoenix real estate, be sure to select an agent with experience in the specific neighborhoods you are considering. A good agent will be able to tell you which streets are on the rise and help you avoid investing in areas on the decline. They can curate lists of houses that meet your budgetary goals and offer the amenities you are seeking.
3. Only put down what you can
Many first-time home buyers are under the mistaken impression that they must put down 20% of the home’s value as a down payment. You might be surprised to learn that the average down payment is 6% for those new to the home-buying process. That’s because it is much easier to secure a good loan today, even if you are unable to commit as much money upfront.
Yes, putting down 20% can help you avoid things like private mortgage insurance, which tacks on extra costs to your monthly mortgage. You also may be able to get a better interest rate on a mortgage loan and impress sellers with your financial preparedness by putting down 20%. But if your bank account would benefit from putting less down on the front end, you should limit yourself. After all, you may be better off having that money available down the road for significant expenses like home repairs.
4. Be aware of property taxes
As a first-time homebuyer, you may not be aware of all of the costs that feed into a monthly payment. The mortgage loan is not the only cost that you will cover each time you write a check. In most instances, insurance payments and taxes will be bundled into your payment.
The assessed value of your home will determine the property taxes you are responsible for paying. Buying a home during a real estate boom, for example, may mean that a home’s value is higher, and therefore your taxes will be higher upon purchasing it. Similarly, homes in areas that require more money for schools or other services may come with steeper taxes. By contrast, you can expect taxes to decrease if the economy is not doing well or the real estate market has stalled.
5. Look for the best financing option
Unless you can pay for a new home in cash, you will need to secure financing from another source. It pays to shop around with different mortgage lenders to find the best rates before committing to one. Conventional loans are among the most common choices, and in many cases, you can make a down payment of as little as 3%. You will need to demonstrate a favorable debt-to-income ratio and strong credit score to qualify for one of these loans. Other options include U.S. Department of Veterans Affairs (VA) loans and United States Department of Agriculture (USDA) loans. For those who qualify for VA or USDA loans, it may not be necessary to make a down payment.
6. Enroll in a homebuyer education course
Finally, consider taking a homebuyer education course before you begin your house hunt. That way, you will know what to anticipate with each step. From a budgetary standpoint, there will be fewer surprises, as well. If you are in the formative stages of pursuing homeownership, a course can help you plan ways to save money for a target down payment or improve your overall financial standing. Additionally, you will learn what happens during closing and what factors will determine your closing costs.
Become a North Phoenix homeowner
As a first-time home buyer, taking the time to understand the steps in the process is key to a successful outcome. Given the competitive nature of the housing market, it also pays to work with a real estate agent. They will know the neighborhoods well and can guide you efficiently toward homes that meet your criteria. When you are ready to make an offer on a home, a skilled agent will know the best strategy given current market conditions and can handle the negotiation efforts.
Turn to The Rider Elite Team when you are ready to begin your journey. Our agents have the most accurate data on the North Phoenix housing market, and we always put our clients first. Contact Beth Rider for assistance when you have questions or want to pursue homeownership.
*Header photo courtesy of Shutterstock
