If you plan to purchase a home for the first time and are feeling slightly overwhelmed, you’re not alone. Acquiring a home is the most significant financial decision many people will ever make.
It just makes good sense to cautiously approach the buying process and strive to learn as much as you can before you finally decide. Fortunately, there is a lot of very good advice available to help you navigate through the buying process, and here are 5 tips from all of us at Amare Real Estate Services in Morgan Hill, CA.
1. Start Saving for Your Down Payment as Soon as You Possibly Can: One of the essential things to do when buying a home for the first time is to plan your finances in advance! Putting a down payment on a home is a big undertaking. Considering the price of most homes today, it will probably take you some time to save enough money for a down payment of any significance.
Of course, you may not necessarily need a big down payment—some mortgage programs let you pay as little as 3% down. But keep in mind, the more you pay down, the better your financial situation will likely be.
2. Research Mortgage Programs That Might be Available to You: There are a lot of programs out there that help first-time buyers get a home. You could very likely be eligible for one or more of them. There are the standard conventional mortgages available to anyone with decent credit. Still, some programs cater to specific groups like veterans (VA Loan) and those buying in rural areas (USDA Loan).
These mortgage programs can make it much easier to buy your first home by giving you more favorable interest rates, lower down payment options, and more.
3. Decide How Much You Want to Spend: A significant step when buying a home for the first time is creating a budget. There are plenty of home buyers out there who got approved for big mortgages and maxed them out—then regretted their decisions for many years to come.
Just because a lender will give you the cash, it does not mean you can actually afford to carry a large mortgage.
There are many costs associated with owning a home that you need to consider. You also want to be sure you can take care of other financial needs, like savings and retirement, while still paying your monthly house payment.
Don’t be pressured into spending more money on a house than you should. If it is a seller’s real estate market, you could easily find yourself in a bidding war and stretching beyond what you intended to pay for your first house.
4. Check Your Credit Before Buying a House: Your credit score can greatly affect the financing options and the interest rate you have when buying a home. It is important to note that the interest rate you receive can impact you financially for many years to come.
Before becoming a first-time home buyer, it makes sense to achieve a good credit score first. If you don’t have the best credit, it might make sense to hold off on buying. The significance of having an excellent credit score before purchasing your first home cannot be understated.
5. Improve Your Credit Score Before Buying a Home: Another significant first-time home buyer tip is to get your financial house in order before buying. If your credit score is not high right now, you might be better off taking some time to improve it before you get a loan. There may be errors on your report that need to be corrected, which can take months.
You can also make a plan for improving your credit and execute that plan—but only once you know where your credit actually stands. If you find that your scores are really not where they should be, I would suggest using a credit improvement company.
What’s Important to Us at Amare Real Estate Services?
At Amare Real Estate Services in Morgan Hill, CA, we help people to change the course of their lives by turning their dreams of home ownership into a reality. At Amare, we want to sell homes, but more importantly, we want to do it the right way. That means we support our community 100%; we run a green business, and we make our customers a #1 priority without exception.
Sources: National Association of Realtors and MSN.com