14 Tips for a Maryland First Time Home Buyer
The time has come! You have decided to stop renting and become one of many Maryland first time home buyers. The state offers beautiful scenery with the ocean, bay, lakes and rivers. It has a great sense of community with both rural and city living. There is something for everyone. Here are 14 tips to help you buy your first home!
Before You Begin Searching For Your First Home
- Get Your Finances Straight – As a Maryland first time home buyer you will need to know what your financial situation looks like because it will be the difference between being approved or denied for a loan. Check your credit report for free to make sure there are no mistakes or negative marks that need to be corrected. Even slightly lower credit scores can cost you thousands of dollars over the lifetime of the loan in higher mortgage interest rates. Correcting errors or bad credit can take time, so don’t delay.
- Find a Buyer’s Agent – Not all real estate agents are the same. Using a buyer’s agent as a first time home buyer in Maryland can be a great advantage. They are familiar with the market and as a buyer’s agent they will have a fiduciary relationship with you. This means that they will have your best interest in mind. Find an agent that you connect with and that you feel they understand your wants and needs.
- Find a Mortgage Lender –Start by asking your friends and family for recommendations. Interview mortgage lenders. Ask about rates. Ask what tips they can recommend. Ask for references and find out about their experience. Choose to work with a lender that you feel comfortable with.
- Determine How Much of a Down Payment You Can Afford –Typically you need to make a 20% down payment to avoid having to get private mortgage insurance (which is different than home owners insurance). Talk to your mortgage lender about requirements and options for down payments.
- Get Pre-Qualified: Before you start your home search talk to a lender to get pre-qualified. This is a quick process where you will supply some financial information to find out an idea of how much you could be approved for. Many sellers will not accept an offer if the buyer has not been pre-approved.
- Research Maryland Mortgage Programs – Investigate what mortgage programs could apply to you. If you are active duty military or a veteran you may qualify for a discounted mortgage rate. There are also programs for Conventional loans, Government loans, special loans for those with student debt buying in a specific destination, and many more. You may even apply for a Maryland first time home buyer grant or other first time home buyer programs in Maryland.
- Decide What Your Budget Is – Do the math to determine how much house you can afford. Just because you are approved for a certain dollar amount does not mean that you need to (or should) spend that much. Determine how much you feel comfortable paying each month for a mortgage. Don’t forget to factor in the additional expenses of homeownership: property taxes, homeowners insurance (possibly flood insurance), and HOA fees. When many renters becoming first time homebuyers in Maryland, they forget to budget for expenses that were included in their rent like maintenance, repairs, lawn care and utilities.
Searching for Your First Home in Maryland
Congratulations! You have your finances in order and experienced professionals in place, it is time to start looking for your first Maryland home.
- Determine Your Needs – Needs and wants are two separate things. Make a list of the features in a house that you need to have. This could be the number of bedrooms that your family needs to live comfortably or a backyard for your dogs. Determine what things you are looking for in a house that you are not willing to compromise on. These items are the things that will be a deal breaker if they are not included in your house.
- Determine Your Wants – This will be the list of things in your house that you want, but don’t necessarily need. This could be things like a certain neighborhood, a fireplace or a swimming pool. These are things that would help push a house to the top of the list, but will not be a deal killer if they aren’t there. Giving your real estate agent a divided lists of needs and wants will help them find the best houses on the market for you.
- Start Looking Online – Once you know exactly what you are looking for you can begin searching for the right house. Contact your real estate agent with any homes that you are interested in seeing.
- Get Your Emotions in Check – While buying a house is an emotional process you do not want to allow your emotions to lead you into making a decision. A time will come when you walk through the front door of a house and feel like it is the only house for you. Do not allow your emotions to convince you to go over your budget or make other compromises that you may regret later.
Do Your Due Diligence On Your First Home
Once you find the home of your dreams, the work isn’t done yet.
- Home Inspection – Having a home inspection completed can save you from being surprised with huge expenses in the future. Inspectors are able to find problems both big and small. If the inspector finds a problem you can decide whether you still want to buy, have the seller make the repairs, or continue your home search.
- Appraisal – You may want to get an appraisal done on the home to give you piece of mind that you are buying it at fair price. In some instances, an appraisal may actually be required.
- Closing – There are many steps to the closing process that will take place before you reach the table. A title search and survey will typically be completed. You will have an opportunity to look at the seller’s disclosure to see if there is anything that grabs your attention. You can inquire with the local government to make sure the tax records describe the house as it is (same number of bedrooms and bathrooms) to confirm no non-permitted work was completed.
Keeping these tips in mind will help make your process smooth to becoming a Maryland first time home buyer.
Don’t know if buying is right for you? Read my article on Top 5 Benefits Of Owning Your Own Home
Looking for Maryland Waterfront Homes For Sale? First read my article on 4 Things About Maryland Waterfront Homes You Need To Know Before Buying!