First-time home buyers often tend to make costly mistakes, which can be avoided with a little planning and foresight. If you’re looking to buy your first house, here are five tips that will help you make an informed decision.
Create a down payment fund at least a year in advance
Don’t rush into buying a home just because an attractive home buying program requires minimal down payment. In the long run, this would mean a larger mortgage and a longer repayment term.
Instead, start saving up with the goal of putting aside at least a 10-20% down payment, and augment your savings with tax refunds and performance bonuses from work.
Decide on the type of home you want and set a budget
When buying your first home it’s important not to get carried away into buying property you can’t afford. Investing in real estate is a big decision, so take the time to research the market, decide what type of home would best suit your future needs in the near future, where you want to have a permanent address and what options are available within your budget.
Remember that location is a key determinant of property prices and buying a home a few miles away from a prime location can save you thousands of dollars.
Take into account the additional expenses
Many first-time home buyers fail to take into account expenses such as closing costs, homeowners’ insurance, moving costs and renovation.
When you move to a new house, you will want to buy some new furniture or may need to carry out minor repairs or renovation to make a preused property livable. Before that you’ll need to spend on a professional home inspection and title searches and pay commission to the real estate agent.
Closing costs can be anywhere between 1 and 6 percent of your mortgage amount, and Protecting the Investment in Your Meridian Idaho Home may require you to purchase mortgage insurance. Build all these items into your budget for a realistic figure.
Keep track of your credit score
A good credit score is necessary for getting approval on a mortgage loan application. Moreover, a good credit score may also help you get a lower interest rate and favorable repayment terms.
Before thinking of buying your first home, check your credit report or any inaccuracies, protect your credit with timely bill and credit card payments, try to clear as much debt as possible, and avoid making new credit card applications, as each application can potentially harm your credit report.
Get in touch with a local agent
The benefit of working with a local real estate agency is that they have vast knowledge about the community they serve, current real estate rates, and steal deals that don’t all show up in online listings.
Approach an experienced and reputed local agency and ask them to help you find a home that fits both your vision of a dream home as well as your budget.