5 First-Time Home Buyer Tips You Need To Know
A complicated yet thrilling experience! It’s time to start preparing to purchase a house. Read five first-time home buyer tips you need to know.
Navigating the adult world is a tricky matter. Buying your first house is one of the most daunting things an adult can experience. If you’re a first-time home buyer, here are some helpful tips you need to know.
Research the Town and Homes in the Area
Ensure you choose a home in a location best suited for you. Not every home or town is the same. Each has its advantages and disadvantages.
Instead of buying a home on a whim, take your time to research different areas. Discover how each town and the average cost of the homes can benefit your life. A house is an investment, and it’s best to know everything before purchasing.
Thoroughly Assess Your Current Financial Situation
Do you have any debt? Are you purchasing the house with another person? How much money do you have saved up? What does your credit score look like?
You need to answer all these questions. Knowing the answers will help you determine what you can afford. Now, you have a set price range that will complement your financial situation and make it a more pleasant first-time buying experience.
Save for a Down Payment
As you work, consistently put money away each month. It gives you peace of mind knowing you have backup funds in case of an emergency.
When planning to buy a house, you’ll need to increase how much you save each month to afford the down payment. First-time buyers typically put down from three to ten percent. While the ideal down payment lies at 20 percent of the cost of the house, it’s most likely unattainable for new buyers.
Higher down payments prove to lenders that you’re a more reliable buyer. Putting down less than 20 percent typically causes the lender to issue private mortgage insurance (PMI) to protect the lender if the buyer fails to pay their loan.
Remember To Save for Closing Costs Too!
Closing costs are another factor that first-time home buyers need to know while saving up. Though it’s the end of the buying process, there’s still more to pay upfront.
Closing costs are processing fees paid to the lender in exchange for the loan. The price ranges from two to six percent of the home’s total cost. The percentage varies from town to town. The lender will provide an estimate at the beginning of the home-buying process so you have an idea of a price to expect.
For first-time buyers, many lenders offer assistance programs to help with down payments and closing costs. The options vary between locations, but it’s a helpful program when taking this important first step.
Meet With a Mortgage Lender Before Buying
It’s not the right time to apply for a loan or go house hunting. Still, it can be beneficial to meet with a mortgage lender before you’re ready to buy. They can go through some of the basics and help you prepare for when you’re truly ready. They’ll give realistic costs and solutions that will make the saving and purchasing processes much easier!
Buying your first home is a big step into adulthood. When you need assistance during the process, you can find the perfect credit union mortgage lenders at GFA. Our mortgage experts have flexible options that can accommodate your home-buying needs.