Tips For First Time Honolulu Home Buyers

Life is looking up and you have decided that it is time to go looking for your first house.  You have a general idea of what you are looking for.  You know how many bedrooms you need, how many bathrooms you want, whether you want to live in the city or the country, and maybe even the exact neighborhood that you want to live in.  But exactly how do you go about buying a house and making sure that it is the house you have always dreamed about?  Take advantage of the experience of other first time home buyers and follow along with these ten tips and you will greatly enhance your chances of getting it right and finding that dream house.
1. Check out the neighborhood before you go looking at houses.  You want to look into as many home sales in the area that you are interested in as you can.  If you can’t get this information on your own then your real estate agent should be able to get it for you.  You want to be able to determine what houses comparable to the one you are interested in have been selling for.  That way you will have a better idea what kind of offer you should make.
2. Know what you can afford.  One of the easiest ways to do this is to go through the loan process and get yourself pre-approved for a mortgage.  Your bank most likely has rules as to how high a percentage of your income your mortgage is allowed to reach.  A good rule of thumb is that you should never be paying more than 30% of your income toward your mortgage.  Any more than this and you may face serious cash flow problems.
3. Don’t forget the other costs.  Everyone knows about mortgage payments and closing costs but most people forget that a new house brings other costs along with it.  You will have property taxes, homeowner’s insurance, and possibly homeowner’s association fees.  You may also face some unexpected repair or remodeling expenses.
4. Consider government money when purchasing your first home.  Take advantage of the first time home buyer tax credits.  And if you are looking for a mortgage consider an FHA loan.  The Federal Housing Authority has tightened its loan requirements in recent years but it is still a good choice for many.
5. Foreclosures may be a good way to get your first Honolulu home.  By looking at Honolulu foreclosures you may be able to find a good deal and get more house than you would be able to afford otherwise.  The only drawback with foreclosures is that you have to act quickly as many people are looking at them trying to find that great deal.
6. Shop around for your title insurance.  Title insurance companies can charge vastly different rates.  You can save 50% or more by shopping around and looking for lower rates.
7. Lower the cost of your homeowner’s insurance.  You can add a security system and smoke detectors to your house and lower your premiums.  Choosing a larger deductible can also lower your premiums.
8. Make as large a down payment on your new house as you can afford.  This will not only lower your monthly mortgage payments but may also lower the interest rate on your loan.
9. Don’t keep looking forever.  Everyone wants to find the perfect house but it is silly to spend years looking for it.  When you find a house that meets all of your needs and you like it then go ahead and make an offer.
10. Prevent potential tax issues.  Many first time home buyer’s borrow money from their parents to make the down payment.  Make sure that this gets set up as a legitimate loan that you will pay back.  Otherwise the IRS will consider the money as a gift and you will end up having to pay taxes on it.
First time home buyer’s would do well to keep these tips in mind.  They will make the experience of buying your first home pleasurable.  That new house really can be your dream home.