5 Tips for the First Time Home Buyer
Buying a home can be nerve-racking, especially if you’re a first time home buyer.
These tips for the first time home buyer will help you navigate the process, save money and avoid common mistakes.
1. Save money for a down payment
You will want to start saving money for a down payment as soon as you start thinking about home shopping. The more money you have for a down payment, the better off you will be. Some new homeowner programs allow as a little as 3%. There are several benefits of a larger down payment including, smaller monthly payments and avoiding paying PMI. PMI is personal mortgage insurance. Most mortgage companies will require PMI with a down payment of less than 20% of the purchase amount.
To figure out how much money you will need for a down payment, checkout Nerdwallet’s down payment calculator.
2. Know your credit score
One of the key factors in getting a mortgage is your credit score. By checking your credit score early, you can get a jump start on fixing errors on your report. This will also give you time to boost your credit score if necessary. Once you have made the decision to buy a home, make sure you work to keep your credit level the same or higher. It’s best to pay off debt, not take on any more, such as buying a new car or opening up a new credit card.
You can get your credit score for free by visiting
https://www.annualcreditreport.com
3. Get pre-qualified for a mortgage
We suggest getting a pre-approval letter from your lender before starting your house hunt.
There are several reasons we suggest getting pre-qualified.
For starters, this will give you a real understanding of your home buying budget. When working with your real estate agent, they will be able to find you the best home for the price within your budget. This knowledge will make the home buying process quicker as well.
The next and just as important reason, home sellers know you are ready to buy. When extending an offer to buy a home, sellers want to know that you can afford to buy. Being pre-qualified for a mortgage with a pre-approval letter gives sellers the confidence to accept your offer over other offers.
We work with lenders who can get you pre-approved without affecting your credit score. Contact us for more information.
4. Work with a licensed real estate agent.
Everyone loves to shop online nowadays, and shopping for a home has become much easier with the internet. You can use the various sites online to see what is for sale and even research what has sold in your desired area.
Shopping for a home online is a great way to start. Once you have narrowed down your options, it’s time to reach out to a local real estate agent. They will have information that might not be readily available online.
Click here to read more about house hunting online.
Pictures online can be deceiving as well. A home that looks great online may not be so beautiful in person. It’s tough to determine odd floor plans online or how your neighbor’s property looks.
A local real estate agent can help you navigate the home buying process with local knowledge. Let them help you. That’s what they love to do!
5. Have an emergency fund in place
In a perfect world, everything goes right. Unfortunately, we don’t live in a perfect world. Things can and will go awry. Having a small cushion of money set aside for an emergency is a great way to reduce the stress of buying your first home. Setting aside as little as $1,000.00 could make a real difference when an unexpected expense occurs.
We are excited you are on the path to home ownership. If you find these tips for the first time home buyer helpful, please let us know. We would love to hear from you.
Contact Laurie for more information
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