Being a first-time home buyer is really exciting but it’s by no means easy. Everything from the local economy to your financials to the housing market in Maryland will impact what home you buy and how much it costs.
Key takeaways for buyers in Maryland
- Seller’s market: Buyer demand exceeds. Most homes are going off market quickly.
- Property values are increasing: Over the next year, homes in Maryland will appreciate by 7.8%.
- Mortgage rates are low: In Maryland, mortgage rates average 2.46% for a 15-year mortgage and 3.02% for a 30-year mortgage.
The Most and Least Expensive Cities in Maryland
Before buying your first home in Maryland search for the areas that will require you to crack open your wallet the widest. So here it is.
Most expensive cities:
- Chevy Chase
- Bethesda
- Potomac
- Ellicott City
- Bowie
Least expensive cities:
- Hagerstown
- Baltimore
- Aberdeen
- Brunswick
- Hampstead
And there you go. Now you are all set to move out your next location, while keeping the money factor in mind. No matter where you choose to buy your new house, you can find affordable home insurance within our trusted network.
With real estate trends you might be tempted to make an impulsive purchase that affect your financial goals and keep you paying a mortgage well into retirement. If you plan to stay in one location for several years, have a good credit score and have a significant down payment saved, then you would often be wise to stop renting and buy a home. There are few tips for first-time home buyers to tackle the home-buying process.
First-Time Home Buyer Tips
Pay Off All Debt and Build an Emergency Fund
Owning a home is expensive. That’s because when you own a home, you’re responsible for all the maintenance and upkeep costs. So, before you even think about buying your first home, make sure you’re debt-free and have an emergency fund for any expenses in place.
Find a Home for Sale in Your Price Range
Find homes online and send them to your real estate agent so they have a good idea of what you’re looking for. Then they can use a multiple listing service to find homes that meet your criteria in your desired areas.
An MLS is created, maintained, and paid for by real estate professionals. This help first-time home buyers to view the largest pool of properties for sale in the marketplace. Real estate agents provide valuable market expertise and can help you find great deals on homes.
Calculate how Much You Can Afford
Before you get emotionally attached to a beautiful house, check your monthly budget to determine how much you can afford. You need to keep in your budget for other things, so make sure your monthly housing costs including taxes, insurance, etc. are going to be no more than 25% of your monthly take-home pay. You’ll also need to factor those numbers in before settling on a maximum home price. Property tax rates and the cost of homeowner’s insurance vary. Check with your real estate agent and insurance company for estimates to calculate how much house you can afford.
You Have Enough Saved for a Down Payment
Renting is attractive for young professionals but once you’re ready to settle down in one city then it could be time to buy a home. Before taking any decision to buy a home, take a look at how much money you have saved in your bank account for a down payment. If you have enough saved for a down payment, then there are usually financial benefits to becoming a homeowner.
Get Preapproved for a Loan
Get prepared for a loan and take the extra time to get a preapproval letter before you start your home search. The best interest rates are typically given to those that have an excellent credit score. Unfortunately, mortgage rates increase substantially with lower scores. Preapproval shows sellers that you’re a serious buyer, which is a great way for first-time home buyers to get ahead in a competitive market. To get preapproved, your lender will need to verify your financial information (proof of income, taxes, etc.) and submit your loan for preliminary underwriting.
Research Neighbourhoods for Best Fit
Visit the neighbourhood at different times and days to check for traffic conditions and noise levels and to see if people are comfortable being outdoors. Only choose a neighbourhood that you and your family feel good about. Your real estate agent can get information on crime rates and the quality of schools around your prospective neighbourhoods.
Attend Open Houses and Think Long Term
Looking at homes that are for sale—even if they’re not a perfect fit for you—is a great way to learn more about the area. When you find a house you love, you’ll know how your place compares to better or worse homes in that neighbourhood. A good strategy is to find the most affordable house in the best neighbourhood. If you buy at the bottom of the price range in a good neighbourhood, you’ll have more to build home value.
Make a Competitive Offer Within Your Budget!
Be careful not to make an offer that’s higher than you can afford just to knock out the competition. Your real estate agent help you make sure your offer is competitive but also within your budget and the home’s value
Prepare for Closing
Once a seller accepts your offer, the closing process starts. A real estate agent schedule the remaining steps from home inspection to final walkthrough, and they will keep you informed.
As you prepare for closing, make sure you read every document and clearly understand every fact—especially before sign the official contract for the home transaction.
Buying first home is a big purchase—maybe the biggest one you’ll have ever made up. Because of that, you don’t want to risk messing this up. A real estate professional take the weight off your shoulders by helping you to find a home, negotiate a deal, and see the process through until closing.