10 Top Tips For First-Time Homebuyers in NJ

a couple holding the outline of a home in the palm of their handsBuying a home for the first time is one of the most exciting purchases you’ll make.

While the process is full of anticipation and enthusiasm, it’s also often stressful and overwhelming. With such a big purchase, it’s important that you prepare as best you can so you end up with a home you love.

Keep reading for a list of tips for first-time homebuyers in NJ.

1. Save Up for Your Down Payment

While deciding to buy a house may sound like an exciting adventure, it’s also an expensive one.

It’s best to spend some time saving up before making the purchase. This will help ensure you have as big of a down payment as possible.

You may have heard that 20% is the right amount to put down, and while a 20% down payment is great, if you have it, most people don’t. In fact, the vast majority of people buying a home for the first time make a down payment of less than 20%.

All of this to say, put some time and thought into the right down payment price for you.

2. Calculate What You Can Afford

Sometimes our eyes are bigger than our wallets when house hunting. To start your search with realistic expectations, calculate what type of house you can afford.

To do this, add up all of your monthly income. Next, make a list of all the expenses you have each month, whether it’s car insurance, student loans, groceries, etc. This will help you discover what kind of mortgage payment you can afford each month.

3. Plan for Extra Financial Factors

Your mortgage won’t be the only substantial cost when purchasing a house. You’ll also need to pay the closing costs, property taxes, and homeowners insurance, just to name a few items.

Plus, once you buy a house, you’ll then need to furnish it. If you buy a fixer-upper, you’ll end up investing even more money.

Make sure you consider every financial factor that will go into purchasing your home so you can plan your finances smartly, as expenses will quickly add up.

4. Choose Your Ideal Location

Consider which area in New Jersey you’d like to live in. Are there specific places you need to be close to? Which location factors are important to you?

If you haven’t already selected a target area for your house hunting, make a list of things that will influence your decision. These could be the commute to work, proximity to kids’ schools and extracurriculars, recreational activities available nearby, and whether the area is walkable.

Knowing which location factors are most important will help you narrow in on a town or neighborhood where you’d like to live.

5. Find a Great Realtor

Choosing a professional realtor will make your first-time homebuyer experience go much smoother. They have the knowledge and expertise to help you every step of the way and can answer all of your questions, helping to eliminate any stress or confusion.

Do your research to find the best realtor for you. Look for realtors who are very familiar with the exact area you’re looking to buy in so that they can give you the most helpful tips and advice specific to your needs.

Asking for realtor recommendations from family or friends who live in the area is a good option too.

6. Create a List of Must-Haves

Think about what you want your house to have.

Do you need three bedrooms? Should it have a garage? Is a backyard a must for you? Write all the things that are most important to you and that are non-negotiable.

Then, you can make a “Would like to have” list with things you’d like your house to have (such as a kitchen island or screened-in porch), but that you’re willing to compromise on.

This list will not only help you figure out what your house possibilities are, but it will help your realtor find you the best options too.

7. Research the Market

Before you start the home-buying process, and after you’ve narrowed down the location where you’d like to live, do a little research online. Look to see how many houses are for sale in your target area to find out how diverse your options will be and then compare the prices of these homes.

You can also do a search to find out what the houses that have recently sold cost in that area.

This kind of research will give you an idea of what you should pay for a comparable home.

8. Explore Your Loan Options

There are lots of loans out there that can help you land the home of your dreams. To find the one that best suits you, you’ll want to compare several options to find good rates and reasonable terms.

Depending on your qualifications, you may look into Federal Housing Administration (FHA) loans, Veterans Affairs (VA) loans, or US Department of Agriculture (USDA) loans.

There are also first-time homebuyer grants you can apply for.

If you’re still feeling overwhelmed or confused by loan options, your realtor may help steer you in the right direction.

9. Consider Getting Pre-Approved

Getting pre-approved for a home loan is a great idea if you want to show sellers you’re serious about buying a home, and it will make your buying process easier.

Getting pre-approved will also help you understand how much money you can afford to borrow.

You’ll need to show that you have a job and proof of income, good credit, and other documentation before you’ll be able to get your pre-approval letter.

10. Take Pictures of Each House

Make sure you take pictures of each housing option so you can go back and talk about the details later on. After seeing a house, write the things you liked about it and the things you didn’t, as well as questions about the house you may have.

Recording a video walkthrough of the home is a useful tool too.

After looking at several options, all the houses and their distinct features will probably blend together. By documenting each home, you’ll be able to look back on each one and decide if it’s the right option or not.

A Guide to Success for First-Time Homebuyers

By following these ten helpful tips and doing the research, you should be able to celebrate your first-time homebuyer status in no time.

Homeowners insurance is an important part of buying a home. If you’re looking for great coverage or have questions about the NJ insurance process, we’re here to help you.