Are you dreaming of buying a home but are a bit overwhelmed about all the information out there regarding mortgage rates, credit reports, neighborhood research, loans, and more?
So many people buy homes every single day. If they can do it, you can to!
Let’s go through some basic, but important, tips for buying your new home
Table of Contents
Are You Financially Ready to Buy?
According to budgetary.com, “Managing budgets and tracking spending is essential if you want to save money.” In order to find out how much can spend on a new home, be sure to start with:
- Taking a comprehensive view of your current financial budget. Consider all of your monthly bills and spending habits (such as going out to eat or your morning stops at the local coffee shop). Also, realize that now is the time to discover the best way to save – on everything! An excellent tool you can use is part of The Consumer Financial Protection Bureau website. The tool gives you a spending tracker aimed to help you figure out where each of your dollars go every month.
- Once you assess your finances and budget, think hard about whether or not NOW is the time for you to make one of life’s biggest purchases. Homeownership is an American dream! But you may discover that, for now, looking for great apartments for rent or leasing a home may work best for your finances right now
Do Your Research
Begin with researching locations that fit your budget. Some things that can help you find the right area to buy a home include:
- If you have children, you’ll want to make sure your potential neighborhood as good schools
- What’s the travel time to your job, and return to home?
- Your Home Type: Are you searching to live a house with a backyard, or a condo, or in an amenity-filled apartment building?
- Property Taxes. Depending on the type of residence and the neighborhood, theses taxes can be sky high. Research the areas that have typical property taxes best for you budget.
How is the Health of Your Current Credit Report?
Do you have good credit? Great! That will be an enormous help in finding the best terms and interest rates on a mortgage.
However, if you need to build up and repair your score, it might be better to wait to buy that home until your credit report is stronger.
edition.cnn.com/ tells us that “if your credit score only meets your lender’s minimum requirements, you’ll probably pay relatively high interest rates and fees on the loan. Lenders typically charge borrowers with lower credit scores more than those with higher scores, and borrowers with exceptional credit (a FICO® Score of 800 or better) typically pay the lowest available interest rates. This can save tens of thousands of dollars over the life of a mortgage…At least three to six months before you begin house hunting or seeking preapproval for a mortgage, it’s a good idea to check your credit report and credit score to know where you stand.”
Mortgage Options
First, go ahead and look into first-time buyer programs; many can help cover the expenses of your down payment as well as closing costs. You can also look into VA, FHA or USDA loans. Always take into consideration term lengths and details, though. For example:
- Fixed-rate mortgage interest rates don’t change during the loan period. That’s a great thing! A fixed-rate mortgage also helps you to budget better, and to always be aware of exactly what you owe
- As for an adjustable-rate loan, you’ll discover that there is a variable interest rate. While it’s true that your beginning interest rate will be lower than other rates (such as fixed-rate loans), however your rate will change over the years depending on the loan’s adjustment frequency
- Getting a mortgage pre approval is a more secure way to buy a home, both for you and for the seller (who has pretty good grasp on how much it costs to sell a house!). Preapproved mortgages ensure that sellers won’t watch your deal fall apart due to lack of finances. This gives you a big leg-up in getting the house you want
After all That Budgeting, Researching and Thinking – Now It’s Time for the Fun Part!
House-shopping is exciting and fun and opens your mind to all of your family’s future happiness. Find a real estate agent that you like and feel connected with. This person will help you more than you know! But also, check out open houses and other types of house showings on your own.
Each home you see, you’ll learn more about what you want – and don’t want.
Now, go find that house of your dreams. And enjoy!
