8 Tips for First Time Home Buyers
Posted by Eric Skates on
There are few things more gratifying than buying your first home. Every mortgage payment brings you closer to owning your home outright. You are building wealth for yourself, not your landlord. You have the freedom to create your dream home. Buying a home is one of your biggest financial investments. You don't want to dive in unprepared. You need to have some things in place before you start your search.
1. Save up for your down payment
There are many different down payment options, some programs don't event require a down payment like a VA Loan. Equity Prime Mortgage can also offer 3% or 5% down payment options, ask your loan officer for more information about these particular programs and if they may be right for you.
Keep in mind, if you opt for a down payment under 20% you will have to pay private mortgage insurance (PMI). This covers the lender if you default on your loan.
2. Don't let doubt stop you from applying for a loan
Many don't bother pursuing homeownership. They think they won't qualify for a loan. Nothing is further from the truth. There are many mortgage options on the market today. First time home buyers may qualify for FHA loans. Though 20% is the ideal down payment these typically require a 3.5% deposit. They also accept less than stellar credit scores. Yet, the higher the credit score the lower the interest rate. Are you a veteran or active duty? You may qualify for a VA loan. If you are moving to a rural area, ask your loan officer about a USDA loan.
3. Check out your credit score
Before you start looking into loan options, you need to examine your credit history. Get a copy of your credit report and look for any blemishes. Pay off any overdue bills or loans. You want your credit score as high as possible. Then, put a halt on using those credit cards for big purchases. Additional activity on your credit can impact your ability to qualify for a loan.
4. Look at your budget
You may be approved for a loan that exceeds your budget. Look at your income and expenses. Your monthly mortgage should not exceed 30% of your take-home pay, we can use our mortgage calculators to help you figure out what you can expect to pay and afford.
5. Compare Loan Programs
Different programs and options will offer you different interest rates. Take the time to compare what you think will work best for you and your family.
6. Get your pre-approval letter
This is a requirement for many real estate agents to consider working with you. Their time is valuable. They don't want to show you homes you don't qualify for. It might be a waste of time to start work if you aren't pre-approved either. This letter states exactly what the lender is willing to lend. It also shows the terms of the loan.
7. Start looking at neighborhoods
Now comes the fun part. The search itself. Start by looking at neighborhoods you want to live in. There are some things you want to consider in each area.
- Do you want to live in a community with an HOA? If so, do you agree with the rules?
- Does the subdivision have amenities like a pool and clubhouse? Are these things important to you?
- Do you have a family or are you considering one? If so, look at the school districts in the area. Do they meet your standards?
- Research crime statistics for the town. Is the neighborhood safe?
8. Hire an agent and find your dream home
The last step is to hire an agent to help you find your dream home. Choose one that is familiar with your town. They will know the history of the area. They are also familiar with the future for the town too. They know about businesses going up soon. Changes in the school districts and zoning are also on their radar. Agents have access to unposted listings too. These are valuable hidden gems. They are a trusted and valuable resource to you.
Buying your first home is the first step to building your wealth. Real estate has a solid history for having a high return on investment. There is nothing like moving into your new home. Utilizing these tips will streamline the process so you can enjoy your new home.
Ready to get started on Your Loan Journey? Click here to get started: https://equityprime.com/loan/graphic-prequal or get connected with a local Equity Prime Mortgage loan officer by calling us toll free at (877) 255-3554