Owning a house is a great achievement for an individual person. Buying a new house is like a dream come true event in everyone’s life.
Most of the people are doing a mistake when buying a house; especially, the first time home buyers. Are you one of them? Don’t worry! I’m providing here some essential tips for the one who do not have proper planning to make your house buying journey – fair and happy.
Shopping House Tips
When you are a first time home buyer, there are several essential factors to be considered when you shop for a house.
#1 Hire a Professional Agent
Realtors are playing a vital role as they are closely associated with you throughout your house buying process. First time home buyers should consider hiring a professionally skilled, knowledgeable, and well-experienced agent.
#2 Pick-up the Right Neighborhood
While searching for a home, you should choose the right neighborhood. Examine nearby schools and parks as they affect your home value, even if you don’t have kids.
Look for the safety of the place and its crime statistics. Map the nearest hospitals, pharmacy, supermarkets, and other amenities.
To check out the traffic, noise level, and other activities you should drive through the neighborhood at different timings on different days.
#3 Stay Intact with your Price
Nobody knows better than you about your budget. First time home buyers make sure everything is covered within your budget. Never compromise with your pricing.
While buying a home, you have to split up the money and keep it separately for home appliances and other essential needs. Always stick to your budget to avoid paying more for a mortgage payment.
Mortgage Tips for Application
Every lender is different so are their changing criteria depending on current market standards. By being organized and prepared can be simple and successful.
#4 Consider your Affordability
Before you plan to buy a house, you need to know your price range. When you have a clear-cut budget, you can plan and invest accordingly.
Moreover, your realtor will help you with reasonable proposals so that you can make wise investment.
#5 Maintain a Good Credit Score
Credit score will give an impact on getting a mortgage loan. It is very imperative to have a good credit score. You should check your credit score; Also if you had begun another new loan activity will be better to pause it immediately.
Some more important factors like your income, savings, and debt-to-income ratio are involved in your mortgage loan approval. While you apply for a mortgage loan, you can subsequently improve credit scores by paying off outstanding accounts on or before the due date.
#6 Compare Mortgage Rates
Comparison is the best method for mortgage loans to prevent yourself from paying more than its market value. It will be better you compare the fixed mortgage rates, adjustable-rate mortgage, capped rates, cash-back deals, and discount rates.
For loans, first time home buyers should get different mortgage quotes for comparison. Depending on the convenience of your income, you can opt for a suitable option.
#7 Get a Pre-approval Letter
Getting a pre-approval letter for a mortgage will give you an evaluation of how much a lender is ready to offer you reliant on your debts and income. It is a written document that determines under which terms of your finance the lender is willing to lend you.
A pre-approval letter in hand increases your chances of giving you an upper hand over other buyers.
Mortgage Down Payment Tips
There are several challenges held for a down-payment to be eligible for a home loan. Factors like loan type, EMI, interest rate, and savings and budget are highly considered by the lender while planning for a down payment. You can find here some of the useful tips for the first time home buyer down-payment.
#8 Paying a High Down Payment
You will get more benefit when you start saving early.
In general, you have to pay 20% as a down payment from the total value; but, some loan programs allow you to buy with less or zero down payment. First-time homebuyer program enables as little as 3% down. Sometimes that’s a good idea, but homeowners occasionally have regrets.
If you make a high down payment lets you get a smaller mortgage. It will make you more affordable household payments. To reach your goal amount using a down payment calculator will be helpful.
#9 Explore Mortgage Options and Down Payment
With distinct varieties of mortgage options, you can choose the most suitable type to overcome the challenges lying for the down payment.
The first time home buyer loan options include
Conventional loans – they follow the standards set by the government-sponsored entities which need as little as 3% down.
Federal Housing Administration (FHA) loans – It offers down payment as low as 3.5%.
Veterans Affairs (VA) loans – Loans insured by the department of VA at times require no down payment at all.
#10 Down Payment Assistance and Programs
First time buyers should consider the first time home buyer programs to seek proper understanding and investment. Down payment assistance programs are managed by a local or state housing authority, by directly a lender or a nonprofit organization. It will help you in closing cost assistance, low or discounted interest rates, and some exemption on taxes.
Methods to Avoid Blunders
When you are new for house investment, it is essential to consider the potential first time home buyer tips to avoid committing some mistakes.
#11 Spending Beyond your Budget
The most common mistake committed by the first time home buyers is emptying their pocket to get their first house.
You have to make wise decisions about your money. When buying a home, spending beyond your budget is not advisable.
No doubt that a beautiful house will tempt you to buy, but you should consider your limits. Always settle for what you can afford.
#12 Overlooking Loan Programs
Buying a new home can be exhilarating as exciting it is. You have got to consider first time home buyers grants and home loans to make fair house dealing. It helps to make your house more affordable and achievable. These programs and grants help make a hazel-free home buying experience.
You never be careless with your credit score. It is essential for a loan, credit card while applying for a mortgage and down payment.
#13 Impulse Buying
Buying a house is undeniably exciting because of which most of the first time home buyers become victims of impulse buying.
Realtors have a chance to convince for making you do an immediate buying. You have to be strong in mind from their appeals; there is no use in blaming realtors after buying a home.
Never make decisions based on your emotions. Think and invest wisely. You should to be open-minded, careful, and free to consider your options. Clarify all the possible queries, no matter how small it is!
#14 Miscalculating the Hidden Costs
Being a new owner, you must pay for property taxes, mortgage insurance, repairs, homeowner insurance, maintenance, and hazard insurance.
Not possessing enough for your monthly budget can put you at risk.
Your agent can help in crunching your tax payments and utility bills. Finally, be ready to set aside with at least 1 % to 3% of home purchase for maintenance expenses.
#15 Draining your Savings
When the first time home buyers are ready for purchase they don’t want anything to come their way, not even a down payment. This leads to the draining of their savings.
Be prepared with extra money for a down payment, mortgage insurance, and mortgage payment to close your deal without draining your complete saving.
Save more money or be prepared with an emergency fund for at least 4 to 6 months of living expenses.
The Bottom Line
The above-given tips are essential to consider while buying a new home to prevent potential mistakes, especially for first time home buying. You can share your views in the comment section on this and also feel free to share your valuable tips if you have any.
