Diving into the world of homeownership is an exhilarating journey, especially for first-timers. For many, purchasing their first house isn't just about the building or its features; it's about laying down roots, creating memories, and establishing a home. According to Self Financial, "First-time home buyers make up roughly 30% of all home buyers each year." So, if you're embarking on this monumental chapter in New Canaan, here are crucial insights and first-time home buyer tips to help guide you.
Fast Facts about First-Time Home Buyers
- In 2021, there was a rise in first-time home buyers, accounting for 34%, up from 31% the previous year.
- The average age for someone stepping into home buying for the first time, as highlighted by BankRate, stands at 33.
- An overwhelming 65% of these fresh home buyers are driven mostly by the desire to own their own residence.
- From 2018 onwards, first-timers typically managed a down payment between 6% and 7% of the home's purchase price.
- For 29% of them, gathering funds for the down payment stood out as the toughest challenge.
- 2021 saw 28% of newcomers in the housing market using monetary gifts or loans from loved ones to boost their down payment.
- Among the younger millennials (23-31 years), almost half felt that student loans restricted their savings potential for homes, a sentiment shared by 44% of their older counterparts (32-41 years).
- Surprisingly, just 11% in age brackets 23-31 and 32-41 started their home-buying process by reaching out to a bank or mortgage lender. Instead, many began their journey online, browsing property listings.
- While the majority, 66%, of these first-timers identify as white, there's also representation from the Hispanic (14%), Asian American (11%), and Black (9%) communities.
- 8% from the 23-31 and 32-41 age groups found the mortgage acquisition the most challenging step.
- Single, younger millennials comprise 21% of all unmarried homebuyers.
- Half of the older millennials — between 32 and 41 years old — have at least one child below 18 sharing their home.
Committing to a mortgage: Are you ready?
Homeownership carries a lot of responsibility, primarily the obligation of a mortgage. Before making any moves, consider whether you're ready to commit to years of monthly payments.
The importance of mortgage preapproval
One can't emphasize enough how essential a preapproval letter is. It not only showcases you as a serious buyer but also gives you an edge in a competitive market.
Taking care of your credit
A good credit report is your best friend when seeking mortgage approval. Make it a point to regularly check for discrepancies and ensure your credit card balances are in check.
The savings journey for your down payment
It's not just about the house price; your down payment plays a significant role in your home-buying process. Start saving early, and explore down payment assistance programs if necessary.
Navigating the maze of loan options
There are multiple avenues for home loans, from conventional loans to FHA loans backed by the Federal Housing Administration. Research and compare mortgage rates to make an informed decision.
Remember the additional expenses of closing
It's not just about the home's purchase price. Closing costs, including various fees and charges, must also be factored into your budget.
Prioritizing your home criteria
Listing out what you absolutely need in your dream house, what you can negotiate on, and what would be a lovely bonus can streamline your house hunting.
Collaborating with a real estate professional
Engaging with an experienced real estate agent like the ones on the Marion Filley Team can make your home-buying journey smoother. They bring market insights, negotiation skills, and a plethora of home-buying tips to the table.
Making an offer? Confidence is key!
Once you've found the house you want to call home, submit your offer with confidence. Remember, in a market like New Canaan, hesitating might mean missing out.
The value of a thorough inspection
A home inspection isn't just another step. It ensures that you're making a sound investment. Any lurking issues can be identified and addressed before the purchase.
Adhering to your financial plan
The allure of a beautiful home can sometimes lead to overstretching your budget. However, it's crucial to remember your financial limits and stick to them.
Safeguarding all your home-related documents
Physical copies of all paperwork related to your home purchase are vital. From your loan documents to the deed, ensure they're safe and easily accessible.
Continuously expanding your real estate knowledge
The real estate market is dynamic. Even after your purchase, stay updated. It's a learning process; the more you know, the better you'll be for future endeavors.
National programs for newcomers in the housing market
Standard mortgages
These are conventional loans offered by most lenders without any government backing. They often require a larger down payment but might offer a lower monthly payment in return.
Veterans' housing benefits
VA loans, backed by the Veterans Affairs, are available for veterans, active-duty service members, and certain National Guard and Reserves members.
Housing loans by the Federal Administration
FHA loans, supported by the Federal Housing Administration, are known for their lower down payments and are particularly popular among first-time buyers.
Rural and suburban housing loans
USDA loans are designed for rural and suburban home buyers and are backed by the United States Department of Agriculture.
About The Marion Filley Team
For over three decades, families in Connecticut have been excellently served by The Marion Filley Team. The real estate experts with the Marion Filley Team are committed to ensuring their clients get the most out of what the market has to offer. If you're contemplating a home sale or purchase or just need some insights about the New Canaan real estate market, do reach out to The Marion Filley Team today.
*Header photo courtesy of Marion Filley Team
