The dream of being a homeowner is more attainable than you may think. Because of the amount of available information, the whole process can seem confusing and daunting.
Purchasing a dream home is a thrilling and emotional course for every homeowner. But before going on that quest for that perfect house, a homeowner needs to know the details of buying a home.
With the help of these first-time home buyer tips below, you can feel better prepared for the different aspects of buying a house entails.Get a Home Loan Quote
1. Take Your Time...Then Act Fast
Let me explain. The idea of owning a home causes many people to jump into the game long before they are ready. They are already in debt, have yet to do research when it comes to the housing market, and have not saved enough for a down payment. Don't let the allure of being a homeowner force you to make a move before you're ready. Here's where your grandma's saying, "get your ducks in a row," is very applicable. Thanks, grandma.
Once you have determined that it is the right time to purchase a home, don't drag your feet. As soon as you have settled on a specific area you'd like to live in, make every effort to see new listings within a few days. If you wait too long to look at a house, chances are it has already been sold.
2. Determine How Much You Can Afford
Determine how much you can manage to pay each month. And not in an "if I get a raise" or "if this new job hires me" kind of way. How much can you realistically afford right now? Sometimes the answer is not much, and that's okay. Just look at it as more time to save for your down payment.
There is no specific way to create a financial home plan every month. Some home buyers create a table or chart to incorporate a computation for their home loan. Others do it a different way. So be sure to pick which technique best suits you for calculating your monthly payment. Then apply that method in managing your journey into purchasing a dream home.
Now, if a house is affordable for you, then stick to your budget. What is one of the biggest mistakes first-time homebuyers make? Falling in love with a house that is way out of their price range. Do not tempt yourself by looking at options that are not within your means "just to see what it’s like." Chances are you will love what you see and then compare all other homes to the ones that will stretch you financially.
Don't let this get you down, though!
There is typically a "five-year rule" as to how long you should conceivably stay in a new home before selling it.
In 2018, the average duration of homeownership in the U.S. was 13 years. So even if your first house isn't the dream home you had envisioned or could afford, that doesn't mean you won’t get the chance to move up into another home!
3. Don't Forget About Homeowners Insurance
Remember to factor the costs of homeowners insurance into your calculations and money-saving endeavors! There are many different options when it comes to homeowners insurance, as well as various coverage options, so be sure to check out a variety of home insurance plans.
Insurance doesn't just protect you; it protects your lender as well. That is why it is required that those who do not own their home have homeowners insurance. Generally speaking, you must obtain a new homeowners insurance plan before closing on your new home and moving in.
In theory, if you purchased your home in cash upfront and thus did not have a mortgage, you would not be required to obtain homeowners insurance. It’s a good idea that you do, though, as it can significantly assist you should something happen to your home.
Save, Save, Save
For a first-time home buyer, remember to save for a down payment. Save for closing costs. Save for the unexpected expenses that come with the homeowner's territory, like the need for new furniture, a washer, and dryer, or unexpected repairs. Many first-time home buyers need to realize that closing costs are separate from their down payment, leaving them in a financial pinch.
Closing costs may be five percent (5%) of the loan amount! Your lender will let you know the exact price. Don't hesitate to get a line breakdown so that you can see just what your money is going to.
4. Shop Around. Then Shop Some More
When it comes to mortgages, a great first-time home buyer tip is, you want to look at multiple options. Multiple options can also set you up for negotiating success, as you may be able to pit lenders against each other. Please don't take the first offer that comes along, as you have nothing to compare it to. Ready to get started? Easily compare mortgage rates here!
5. Credit Score Standing
Another great first-time home buyer tip is to check your credit score standing. Suppose you have decided to apply for a home loan. In that case, your credit score will assist you in defining the various financing home loans available. Apart from other considerations, creditors apply your credit score standing to establish the amount of your loan and determine if you are capable of repaying your home loan. Of course, suppose you have an excellent account credit score. In that case, you will have a more incredible opportunity to obtain financing and much more, providing you with great interest rates and conditions.
6. Get Pre-Approved
With a pre-approval letter, you show that you are a serious buyer. As pre-approval requires a lender to verify your information, it's a good indication that if you proceeded with the loan, you would likely be approved for it.
You do not want to lose out on the perfect house because someone else had a pre-approval letter, and you did not! Keep in mind that pre-approval is different from pre-qualification. Many pre-qualify for a home loan; only a few are pre-approved for one.
7. Make Sure All the Pieces Fit
If your dream home is in a part of town you do not like or will significantly extend your work commute, it may not be your dream home. Before settling on a house, make sure you will be happy overall, not just while inside.
To ensure a good quality of life, check out different areas, consider commuting times, and look at schools in the area if you have children or plan on having them. All of these things should factor into your decision-making process.
Have Fun With Homebuying!
Yes, it is an overwhelming amount of information to be aware of. To help make the entire process more enjoyable - as it should be, this is your very first house! - take it step by step. Your house-buying endeavor becomes more manageable by tackling one thing at a time. You can take your time researching and go at a pace you're comfortable with. Sitting down in one weekend and trying to answer every home purchasing question that comes along will leave you feeling burnt out.
Take your time and do your homework! We highly recommend implementing these first-time home buyer tips. So when the time comes, all of the prep work you have put into this over the last few weeks or even months will make it easier to secure a competitive mortgage and find a home in which you can be happy!
Final Thoughts for First-Time Home Buyers
Make sure you are financially healthy and preserve your financial well-being to build up the quality of buying your dream home.
Purchasing a house may include a lot of difficult phases. Still, these first-time home buyer tips, together with a reputable company like Lendgo, can guide you in finding that dream home!Get Quotes Now