Financing Basics: Tips for First-Time Home Buyers
Do you remember the feeling that you had when you first stepped foot into your brand-new home? It probably felt exhilarating, right? Until you were hit with a load of unexpected challenges, that is. Luckily, there are a few ways to avoid the anvils when buying a new home.
It won't be easy – it'll take time, an ample amount of effort, research, and, of course, patience. But in the end, all your hard work will be worth it. Here are some tips to remember if you're a first-time homebuyer.
Get Pre-Approved Before Your Search
Being in the position to buy a home is a priority before you even start looking for houses in your area or another neighborhood. This will prevent you from finding out at the last second that you can’t afford a house that you were looking at for months or having to resort to a home that is below your standards.
This step requires contacting mortgage services, and it's best to contact more than one in case one points out an advantage you have that others didn’t. You'll also need a pre-approval letter for evidence that you are a qualified owner of the home.
Check Your Credit
If you make reasonable purchases on a day-to-day basis, then it can be easy to assume that you have a good credit score. However, there's always the chance that you overlooked something that could take your credit down a few points and therefore your chances of being able to afford your ideal home.
There are different services that can help you figure out where you currently stand so that you know if you need to bring your credit score up. Changing the way you buy things going forward can also help.
Pay Off All Debt
Owning a home puts all of the responsibility of paying bills and keeping the house in good shape on you. Even if the monthly payments are the same or less than your previous home, accidents can occur that not only cause heavy damage to your home but also cost more than you may be able to afford.
This is why you need to make sure that there are no debts on your shoulders and that you have money saved for any issues that might occur, whether they come from nature or a lack of care from the previous owner. There should also be money to prevent possible debt in the future.
Create a Budget
Similar to our previous tip, this one involves having the right amount of money saved up for putting it down on the house and being able to make payments down the line. However, budgeting involves more of what you should have than what you shouldn’t, as the right budget will save you plenty of problems in the future.
A budget will include a variety of bills that aren't directly related to house expenses, such as utility, cell phone, groceries, daycare, tuition, and car insurance. You need to be strict about where you spend your money so that you don't run short in any areas.
Check Out Lenders
Getting the opinions of different professionals will allow you to get a better idea of your options, whether it’s houses, neighborhoods, or both. When it comes to mortgage rates, you'll need to compare as many lenders as possible so that you get the best deal. Otherwise, you could get ripped off, either due to the intentions of the lenders or their lack of knowledge.
The lenders should be able to provide plenty of information, such as loan fees, customer service, and time frames for going in on your rate. This could also affect how early you should apply for pre-approval due to debts or credit scores.
Hire a Real Estate Agent
Despite the research you can do and should do, about the houses on your list and the neighborhoods they reside in, you'll benefit greatly from hiring an expert. That's where real estate agents come in, as they will be able to determine if your prospects are worth the long-term investment as well as the best times to buy.
Another plus point of having one of these agents is having them negotiate on prices and terms so that you get a fair deal. They can also figure out what issues the houses currently have or could have in the future, which could save you money in the long run.
Have Information in Writing
As much as lenders and real estate agents may have your back and provide expertise, having agreements in writing will guarantee that everyone knows the terms of your ownership. This will also help you save money on any expenses that you are not liable for.
The deal should specify terms for factors such as mortgage approval ratings and home inspection, and deadlines should be emphasized to show that you are fulfilling your end. Estimates from contractors for possible damages and additions will help determine the agreement.
Remember these tips so that you buy your first house without any issues and enjoy a comfortable living experience.