Alaskan Real Estate Market: Common First-time Homebuyer Mistakes
2015 has been called the "Year of the First-time Homebuyer" for many reasons— lower interest rates, pent-up demand, new low down payment mortgages and rising rents. Many Fairbanks, Anchorage, Eagle River, Palmer residents will jump into the real estate market this year and quickly find it can be an overwhelming and challenging experience.
The team at Madden Real Estate is here to help! Not only can we help prepare you to buy a home in Alaska, but we can also walk you through the process to ensure you do not run into these common first-time homebuyer mistakes:
Mistake #1: Not Knowing How Much You Can Afford
First-time homebuyers tend to confuse how much they can borrow with how much they should borrow. One great place to start is using a mortgage calculator to plug in the costs of homeownership. Be careful to consider all expenses, including insurance, maintenance and utilities to get an accurate estimate.
However, the amount you should borrow also depends on the type of lifestyle you'd like to maintain. If you enjoy traveling and making larger purchases, a lower mortgage payment would be wise. If you tend to spend most of your time in your home, spending more of your income on housing is possible. Find the number that you can comfortably afford each month and stick to it.
Mistake #2: Not Getting Pre-Approved
As a first-time homebuyer, it is important to be prepared. One of your first steps should be getting pre-approved for a mortgage, even before you begin looking at available homes in Alaska. Getting pre-approved will show you the amount of home you can realistically afford and also show both sellers and agents that you are both serious and able to make the purchase. We can recommend professionals in the area to assist with this!
Mistake #3: Not Having a Down Payment
Perhaps what has held many first-time homebuyers back before is the lack of a down payment. In today's real estate market, there are low down payment mortgages that can help, but you will still need to provide some money up front. Make a plan for your home purchase, make a timeline and start saving toward it. When the time comes to purchase the home, you will be equipped with at least some of a down payment.
Mistake #4: Not Doing the Research
First-time homebuyers in Fairbanks, Anchorage, Eagle River, Palmer, Wasilla and North Pole need to be sure to factor in all costs of owning a home— the mortgage is not the only one! Factor in closing costs, appraisals, home inspection and loan origination fees. While some of these can be rolled into your mortgage payment, some will need to be paid up front. Do the research upfront to avoid being blindsided by these extra costs.
Do you ever wish buying a home in Alaska came with a guidebook or a road map? Take a look at the infographic below!
It all starts with the down payment and trickles down through credit scores, first-time buyers programs, getting pre-approved, and working with a real estate professional. You can get started on many of these homebuyer tasks now in anticipation of the busy spring season!
Have questions about where to go next? Contact us! We'd be glad to hear from you!