7 Tips For First Time Home Buyers

Dated: 08/21/2017

Views: 416

1. START SAVING FOR A DOWN PAYMENT

It is common to put as much as 20% down when taking out a mortgage. This keeps costs lower and you do not have to get Private Mortgage Insurance (PMI). But there are many options if you cannot afford to put down that much. Not a lot of people can. FHA loans require as little as 3.5%. If you qualify for a VA loan, which may require no down payment at all.


2. CHECK CREDIT SCORE

Your credit is a key factor in whether or not you will be approved for a loan, and helps determine the interest rate of a loan. You should dispute any errors you may find that are dragging down your credit score. Avoid opening any new credit while trying to get a mortgage, as this will put a temporary dent in your score.


3. BUDGET FOR CLOSING COSTS

Closing costs are generally between 2-5% of the loan amount. Don’t panic though. As your REALTOR, we can negotiate and ask the seller to help pay these costs.


4. RESEARCH DIFFERENT MORTGAGES

Do some research on the different types of mortgages. A 30-year Fixed Rate may be right for most people, but maybe not for you. If you can afford a higher payment, a lower interest rate 15-year fixed rate mortgage may be beneficial to you. Shop around and compare rates with multiple lenders before making your choice.


5. HOW MUCH HOME CAN YOU AFFORD?

Getting Pre-Qualified will give you an estimate on how much a lender will give you, and let you know approximately how much home you can afford. But as you get closer to buying a home, it is very beneficial to get a Pre-Approved, which is when a lender confirms in writing how much they are willing to lend you. Accompanying this letter with an offer makes it that much stronger, and gives you an advantage over buyers in multiple offer situations, that did not take that extra step to get Pre-Approved.


6. DON’T BE TOO PICKY

Don’t get too caught up in paint colors and fixtures. These are easy fixes after the home is yours. By no means do you just settle on a home, but it is rare to find a home that is perfect in every way.


7. CONSIDER YOUR FUTURE NEEDS

Consider your future needs when looking at homes. If you are planning on starting a family in the near future, make sure the home can fit your future needs.

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