Thinking of Buying Your First Home?
Don’t be daunted by the leap into unknown waters! Buying a home for the first time may seem like an overwhelming process, especially when you have no idea where to start, but there are plenty of places to find step-by-step resources, expert advice, and even a hand to hold throughout the entire process. If you’re feeling a bit overwhelmed by the thought of approaching the real estate market in New Orleans, then it’s time to start reading!
Homes for Sale in New Orleans: Under 200k
Before You Buy
Don’t just jump right in! This is the time to start off slow, get educated, and get organized! The more prepared you are, the less overwhelming the real estate process will be.
1. Asses Your Needs
What kind of home will best suit your needs? Will you be searching for a new home, an old home, a cozy townhome, or a large single-family home? And where will you want to be located? In the city? Suburbs? In a gated neighborhood or condo complex? And about how much will a home of about your needs and location cost?
2. Go Loan Shopping
Yes, before you even start looking at homes, you should determine whether you qualify for a loan, and what size loan you qualify for. This will help you set realistic expectations for what you can actually afford. It's also a good idea to do some research to see if you might qualify for special Federal or State funding or programs, especially those targeted to first-time buyers. There are many programs available to assist new buyers with making or meeting down payments.
Understanding Loans: What Types of Loans are Available?
- Fixed-Rate Mortgage: The interest on this type doesn’t change, so your monthly payments won’t change, making it a very predictable option.
- Adjustable-rate Mortgage: Interest rates on an adjustable mortgage tend to start lower, but they can fluctuate with the market, making them very unpredictable and sometimes risky.
- Government Mortgage Programs: Programs such as the Veteran’s Administration and the Department of Agriculture can offer special loans to qualified buyers. These, and other special programs available through the state or city, can greatly assist first-time buyers in financing loans and down payments.
3. Organize Your Finances
Just because you qualify for a loan, it doesn’t mean it’s a good investment. First, you will need to determine the specifics of your income and spending. What are you bringing in every month, what are you spending, and how much can you really afford to pay for your housing every month?
After you take some time to work out the details, it’s time to start shopping! Well, almost...
1. Find an Expert
Especially as a first-time buyer just getting your toes wet in the unknown waters of the real estate market, it’s very important to find a Realtor you trust to guide you through the process and help you make important buying decisions. Searching for a Realtor who specializes in first-time buyers might be a good idea, as they will likely have a high level experience dealing with clients new to the market.
2. Go Home-Shopping
Yes, finally—the fun part! Start with a home search tool to find homes by price, amenities, location, style, and more. Attend open houses to check out your competition. Have your Realtor schedule showings of your favorite homes.
3. Re-Organize Your Finances
This means finding a loan. You can shop on your own or use a mortgage broker to help you find different investors, but either way, it’s important to shop around and make sure you’re getting the best possible financing options. This can save you money every month and in the long-term.
Understanding Mortgages: What Do They Include?
- Principle: This is the repayment of the initial amount you borrowed from your lender (in layman's terms, the price of your home).
- Interest: This is a payment to the lender for the money borrowed (which ends up adding on to the TOTAL amount borrowed, or the price of your home).
- Homeowner’s Insurance: This monthly payment covers you against various hazards, and is often subtracted from your mortgage.
- Property Taxes: Your annual city and county taxes assessed on your property are divided by the number of mortgage payments you make in a year, and added into your mortgage.
4. Make an Offer
Sit down with your Realtor to determine what you can afford and what would be a good asking price for the house you want to buy. Then, make an offer!
First-Time Buyer FAQ: What Do I Pay Upfront?
- Earnest money: Think of this as your “security deposit”. It's paid when you submit your offer to show the seller that you are serious. When your offer is accepted, it is applied to your down payment or closing costs.
- Down Payment: This is determined by your loan, or possibly any government programs or assistance you have requested.
- Closing Costs: These are typically low for buyers and represent the fees associated with paperwork and lender charges.
5. Request a Home Inspection
If the seller accepts your offer, it’s time for a home inspection. Before you close, you want to have an experience professional walk the house to ensure that there aren’t any lingering problems or maintenance issues that might not be visible at first glance. You don’t want to be hit with a leaky roof or plumbing issue right after you buy!
This is where your Realtor can really come in handy and walk you through all that paperwork!
After You Buy
Remember, a home is more than just the place where you live. It’s a financial investment, and a large one at that. And just as you would perform regular oil changes and maintenance in a car, your home will need regular updates and small fixes to ensure everything stays in working order. It’s a good idea to have an emergency fund, just in case something more serious does occur down the road.
Still Have Questions?
I bet you do! Buying your first home is no simple process, and though I have tried to provide as many important details as possible in my first-time buyers guide, there's still much to ask and learn. So don't wait—contact me today and ask away!
The multiple listing information is provided by the Gulf South Real Estate Information Network from a copyrighted compilation of listings. The compilation of listings and each individual listing are ©2020 Gulf South Real Estate Information Network. All Rights Reserved. The information provided is for consumers, personal, noncommercial use and may not be used for any purpose other than to identify prospective properties consumers may be interested in purchasing. All properties are subject to prior sale or withdrawal. All information provided is deemed reliable but is not guaranteed accurate, and should be independently verified.