Buying your first property is a huge milestone - it's also a pretty big adventure that can be a bit nerve-wracking. But hey, don't worry! Here are seven tips to help you navigate this exciting new journey. Let's start off with a simple one: plan early and start saving as soon as you can. There are plenty of ways for first-time home buyers like you to save some money, from increasing your income with the right banking and retirement plans, to setting up an automatic savings scheme. So, take a deep breath and let's dive into this thrilling new chapter together!
Determine the amount of down payment you can afford.
It would be ideal if you could make a down payment of 20% or more. This way, you wouldn't need to buy private mortgage insurance to fill the gap. However, we understand that this might not be possible for everyone. That's where a down payment calculator can come in handy to help you decide whether to buy a less expensive house or take on more debt. As a rule of thumb, try to keep your monthly mortgage payment to no more than 36% of your total income. Don't forget to factor in other expenses such as moving, closing costs, and homeowners insurance.
Discover all the possible loan and mortgage options available.
Through a veterans mortgage program, there's a chance you could be eligible for a first-time homeowners loan. Not only that, but you might also have access to grants from local, state, or federal programs. The best part? You could potentially use multiple sources of down payment assistance at the same time.
Boost your credit rating!
Once you've figured out how much you can spend and how much you need to save, take a good look at your credit. It's a big deal because it doesn't just affect whether or not you get approved for a loan, but also the terms and interest rates of your mortgage. Try finding ways to boost your credit score, like correcting any mistakes and sorting out any debts that haven't been dealt with yet.
Do some comparison shopping?
Consider getting quotes for mortgage rates from different lenders so you can compare their terms, rates, and charges. If you're financially able, why not chat with lenders about the chance to prepay interest and get a lower interest rate on your loans by purchasing discount points? It could be a great opportunity!
Find the right real estate agent who suits your needs.
Congratulations on selecting your dream neighborhood! After taking into account local schools, crime rates, and proximity to amenities, now it's time for the fun part - finding a real estate agent who knows your chosen neighborhood well. Remember, it's important to do your research and get a reliable recommendation from someone you trust. Now, it's time to get your paperwork in order, including the preapproval letter. Begin compiling all the documents you'll need to apply for a first-time home buyer mortgage, such as your pay stubs, tax returns, and bank statements. Before you make a serious offer on a home, ensure you have a preapproval letter from your bank or lender. To obtain this, you'll need to complete an official mortgage application and provide proof of income, assets, and credit. Keep in mind, as a first-time home buyer, you're not alone in this journey. Don't hesitate to reach out to your local Valley branch to see if they offer consultation services to assist you every step of the way, from application to closing. Also, consider using this handy calculator to figure out how much you can comfortably afford for a mortgage. It's a big step, but with a little preparation, you'll be a homeowner in no time!
If you're looking to make that first big purchase and haven't found an agent yet, First Capitol Real Estate is here to help you through every step of the way. Give us a call (717) 779-9833.
