You are done renting, and it’s time to start thinking about buying your first home.
Interest rates are the lowest they’ve been in years. It’s time to purchase a long-term investment.
Before you take the leap, make sure you know a few things about home buying.
1. Down Payment
In most situations, you’ll be required to put down 20% by lending agencies. There are some programs for first-time home buyers that assist with the down payment.
2. How Much Can You Afford?
Talk with a lender or use an online calculator to figure out how much you can afford to spend.
Just because you have a limit doesn’t mean you should buy at the maximum. Remember, you will want to put money aside to furnish the home.
3. Credit Score
All your assets and debts will be considered, but your credit score can also affect your eligibility and what kind of interest rate you’ll get on your mortgage.
Keep your credit score high by not opening any new accounts or making new large purchases. Opening department store credit cards and taking small loans will negatively impact the assessment.
4. Mortgage Rates
Every lender will have their own set of mortgage rates. Give yourself the option to get a good rate by shopping around.
Some lending companies will let you pre-pay interest up front in exchange for lower interest rates over the life of the loan.
5. Pre-approval Letter for Buying Your First Home
A pre-qualification gives you a rough estimate of the price range of homes you can afford. A pre-approval means the lending company has combed through your financials and approved you for an amount.
Show real estate agents and home sellers you’re serious with a pre-approval letter.
Unless you are a real estate agent, it would be wise to hire one who knows the area and your preferences.
It helps to meet with a few before making the commitment to hire one.
7. Research the Neighborhood
Have you checked out the local schools and parks? Make sure the neighborhood has everything you desire.
Check the crime rates and where the local grocery stores are. If you can, ask some local residents about the area and their opinions.
Stick to your budget when buying a house. It can be tempting to throw caution out the window when looking at beautiful homes.
A higher sticker price equals a higher monthly payment and insurance. Shop with your head and not your heart.
9. See Your Options
Go to every open house and showing that might interest you. Open houses are a great way to get more information your real estate agent might not know.
Real estate agents usually have busy schedules, too. You will be at their mercy when looking for a home.
It’s really exciting when we find the home that matches our checklist. Don’t forget to negotiate on the price.
Your ability and willingness to negotiate could save you thousands of dollars in the end.
11. Home Inspection
The home inspection before closing on a house can make or break the deal. Pick a professional you know will be able to spot potentially expensive problems.
Congratulations! You are ready to begin the process of buying your first home.
Move out of your old apartment or your parents home and take advantage of the great interest rates. Check out our website to learn more information about purchasing a home.