We all go through the stage of moving out of your parent’s house or moving out of an apartment in order to look for your first home! Becoming a first-time home buyer is a huge change and one that shouldn’t be taken lightly. We want to share with you some helpful tips for first-time home buyers to make this process as easy as possible for you!
Save, Save, Save
Purchasing a home for the first time comes with a lot of foreseen and unforeseen costs. It is important to have money saved up for all of these encounters. Some foreseen costs include a down payment, closing costs, and monthly bills, such as water, electric, and gas. Saving enough more for at least 20% of a down payment will allow you to avoid paying for a private mortgage insurance (PMI), while saving for closing costs will allow you to not be shocked when they are about 3-4% of the purchase price of your home. Saving for things like these, as well as unforeseen costs, will reduce your stress and anxiety levels involved in purchasing your first home.
Know Your Credit Score
If you are getting ready to take out a mortgage loan, you need to be sure you know what your credit score is. Your credit score is an important number to know because it informs you on exactly how much money you are able to take out, the interest rates you can afford, and potentially loan terms.
Get Pre-Approved First
If you get a pre-approval statement, rather than getting pre-qualified for a loan, then you are more likely to get that buyer’s agent to help you, as well as better interest rates and better deals. Getting pre-approved tells you exactly what you can afford and what the bank is willing to loan you. This will help you determine a price range and allow you to search for homes specifically within that price range.
Check Out Some Neighborhoods
Before you begin to look into potential homes, you need to get a general idea of the neighborhood you want to be moving into. It’s a good idea to look around the neighborhood throughout various times of the day to see its surrounding activities. It’s also a good idea to see how far that neighborhood is from your workplace, the schools in that district or the nearest grocery store. You want to make sure you're not only getting the best real estate but also the best neighborhood.
Prior to purchasing a home, you need to think about things in the long-term, not just this upcoming year. Is this house for more than a couple of years? Do you plan on having children? Do you want pets? How do you plan on reselling it? Do you want to remodel? You need to consider these questions while considering homes. Make sure your home fits with your future plans.