Buying a home is always going to be exciting. You finally get a place where you can call home. Contrary to popular belief, owning a home is still part and parcel of the American dream. Getting the right home can be a challenging endeavor. You’ll have to look around before finding something that you like. Since it will be your first time, you might not know what to look out for when searching for a home. In this post, we’re going to highlight some of the tips that will come in handy when searching for your dream home.
Pay Off Debts
Before you can even think about starting to look for a house, it is imperative that you’re paying off all your debts. Owning a home is an expensive undertaking. It is a lot more expensive than renting. You will be committing to a long-term financial commitment. Other than the purchase, you will also be responsible for day-to-day maintenance. This could be a challenging task if you’re paying the mortgage and other debts.
It is recommended to have an emergency fund set aside if you’re thinking of buying a home. You’re also supposed to be debt-free when paying for the mortgage to avoid any financial constraints. You could lose the house if you consistently fail to pay the monthly rates.
Determine the House You Can Afford
You might have identified a couple of houses after going on the internet to research. You should be asking yourself if you can afford to finance the house that you desire. The question of how much you can afford to set aside will depend on a couple of factors. Your credit score will play a big role in the interest rates you get from the lending provider. With a bad credit score, you can expect to get high-interest rates. There are additional costs that come with owning a home. There are property taxes and homeowner’s insurance which will have an effect on the monthly repayment. These two costs vary and it is important that you’re consulting with the lending provider before making the decision.
Save for a Down Payment
Saving up for a house can take years. The alternative would be to save for the down payment which will be 20% or more of the total value. This will help you to not have to pay for the Private Mortgage Insurance, which is meant to protect the lender in case you fail to make the monthly payments and end up in a foreclosure situation. A 20% down payment might be out of reach for you. There are lenders that offer single-digit down payments for first-time homebuyers. It will be tempting to go for such an option but you’re likely to pay more in the long run. It is advisable to be patient until you raise the money for the down payment.
Closing Costs
Along with the down payments, you should also be saving for the closing costs. Most first-time homebuyers might not be aware of how much it takes to close a house. According to industry standards, the average of closing a house is at 4% of the purchase of the home. The lender should be open with the specific number from the onset so that you know the exact costs involved before you commit financially.
Getting a Preapproved Loan
Once you’ve saved enough for the down payment, the next challenge will be to get a lender that will provide the 80% that is remaining. In order to get preapproved for the loan, the buyer will have to verify the financial information that is provided. If you have a good credit score, you shouldn’t have problems getting preapproved easily. There are companies like Networth Property that helps first-time homebuyers overcome some of the challenges that come with home purchasing and ownership.
Finding a Home
The home that you’re searching for should be within your price range. The internet can be used as a great research tool. You can narrow down the search depending on your budget. You should also reach out to a local real estate agent to help with the property search. Make sure to inform them about your set budget so that they’re looking for houses that you can afford. Research homes by neighborhoods so that you can determine the right one that fits your needs. Searching for and buying a home for a first-time buyer doesn’t have to be that complicated, provided you know what you’re looking for.
I’m a 20-something stay-at-home mother and wife. I have an amazing husband, a beautiful daughter, two loving dogs, and a lazy cat. I wouldn’t change my life for anything! I love to read, listen to music, cook and blog!
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