4 Tips For First Time Home Buyers

Buying a house is an exciting investment, but where do you start? For first-time homebuyers especially, the process can seem complicated and a bit scary. However, if you do your homework and prepare, you will have the keys to your new home in no time. Here are some helpful tips for every first-time home buyer!

Check & Manage Your Credit

Your lender is going to check a few factors, and your FICO credit score is one of the most important. However, what is your credit score? It’s a number ranging from 300 to 850 that sums up your credit history, which includes your payment history, outstanding balances, length of credit history, outstanding balances, length of credit history, types of credit used, and the number of credit inquiries. Your credit score shows your lender your credit worthiness and the risk of lending to you. It may also affect your interest rate and loan type. Basically, the higher your credit score, the better. If you want to check your credit score and keep track of it a good place to go is, it’s completely free and it includes tips on how to improve your current score.

Determine What You Can Afford

You should look at your monthly budget and decide on a housing budget moving forward. What do you currently spend on rent and housing each month? Are you comfortable with this amount? Depending on your debt-to-income ratio, your lender will qualify you for certain dollar amount. They’ll give you a loan estimate that shows your estimated monthly payment. Really consider if you’ll be comfortable with this amount every month and don’t forget that number doesn’t include water, electric, cable, etc.

Remember, just because you qualify for a certain amount, doesn’t mean you have to max out your budget.

Start Saving Money

One of the biggest factors that keep people from buying a home is lack of a down payment. Conventional loans require a down payment of 20% to avoid PMI, but there are many loan options available that offer low and no down payment options for borrowers who qualify. FHA loans, for example, require a 3.5% down payment. A VA loan offers active and retired military members favorable loan terms with 0% down. Talk with your lender about your loan options so you know how much of a down payment you will need to makes. Whether you are planning to put 20% down or 3.5%, you should start saving now!

Don’t Forget About Closing Costs

While many loans offer low and no down payments options, buying a home may still involve some cash upfront – closing costs. Closing costs are generally 2% to 6% of your purchase price and include things like title and recording fees, prepaid, escrow, loan-related fees, mortgage insurance, and third-party fees. you and your agent can negotiate with the seller to cover some of your closing costs, but how much exactly is dependent on the type of loan you get.


How To Make The Perfect Offer & Get Your Dream House

Making an offer on a home is often considered to be an art form because if you offer too low the seller may not take you seriously and too high and the house may not appraise. So making the perfect offer depends on the market you're in and other factors you should...

read more

Tips For Finding The Best Mortgage Lender

Buying a new home is an exciting time in your life. In order to ensure a positive experience, it's important to properly prepare yourself before jumping in. One of the most valuable ways to do this is by finding a great lender. So how do you decide who would be the...

read more

When Is It A Good Time To Buy A House?

It is easy to see the financial side of a huge purchase like buying a house, but it's a big move for your personal life, too. Once you have your mind set on buying a house, timing is everything. Waiting for the best time can help you find your dream home that suits...

read more

8 Questions to Ask When Looking at Neighborhoods

Falling in love with a house is only half of the equation; it is also important to fall in love with the neighborhood. You can find a home that seems perfect for you, but, if the surrounding area doesn't meet your needs or expectations, you may end up being...

read more

5 Ways to Build Your Home Equity Faster

As you make your monthly mortgage loan payments, you naturally gain equity in your home. If you pay on time, your equity will grow on its own as your principal loan balance decreases, but you can also help speed up the process. Plan To Pay More Toward Your Principal...

read more