So, you’re in the market for buying your first house. What an exciting time! Purchasing your first home can be exhilarating and a bit intimidating. After all, this is certainly one of the biggest financial moves you’ll ever make. Here are seven tips to help you prepare to close the deal with confidence.
1. Take Your Time
There are many different factors to consider when buying a home. Making a wish list before you go house hunting is a good place to start. Also take the time to broaden your research on real estate property beforehand, as it can save you time and undue stress down the road. The more time you invest in the research phase, the better home you will end up owning.
2. Check Your Credit
Your credit score is a huge factor when you’re buying a house because it impacts both your eligibility for the loan and the interest rate you get. Having a good score makes the entire process easier and more affordable – if your credit scores are high, it tells lenders that you’re responsible with your money and will likely pay them back on time. If your score is lower, you’re seen as a riskier investment for most lenders. You can check with your financial institution or visit AnnualCreditReport.com to get a free credit report.
3. Shop Around Before Choosing a Mortgage Lender
When shopping around for the best mortgage rates, make time to research various lenders until you find the one that works for you. Each lender sets its own underwriting guidelines, fees, and interest rates. Yes, you can find a better deal with one lender than with another. Every point in your rate matters. Even a quarter-percent lower rate can save you thousands of dollars over time. It’s also important to look at the interest rate type. An adjustable-rate mortgage may rise at some point in the loan term and increase your monthly payment, while a fixed-rate mortgage won’t change. You’ll need to find a lender that best fits your needs and gives you the rates and payments you can afford.
4. Do Your Research Before Choosing Your Insurance
If you’re getting a mortgage for your new home, your lender will require homeowners’ insurance. Your home may be the largest purchase you will ever make and protecting your finances against the threat of home repair or rebuilding costs is important. There are various types of insurance plans, and it’s good to understand the features and benefits of each. Our Shopping for Insurance educational course can help you along the way!
5. Set aside savings for the extra expenses
When it comes to purchasing your new home, it’s important to be realistic about what you can expect to pay. Beyond mortgage and insurance, there are additional costs all new homeowners need to factor into their budget, such as property taxes, closing costs, homeowners’ insurance, moving costs, just to name a few. While allocating some of your savings towards your new home, it’s important to cover those extra expenses.
6. Be Attentive at The Time of Inspection
It’s smart to hire a professional home inspector, but also take the time to do a walk-through of the home yourself. This is the perfect opportunity for you to inspect the new home right before completing the purchase. You want to make certain the property is in the exact condition you agreed to buy it, including all agreed-on repairs. Inspect the inside (doors, windows, appliances, bathrooms, floors, walls, etc.) and outside (landscaping, gate and gate latches, garage door, etc.). This general inspection will provide you peace of mind at the time of closing the deal.
7. Buy for Long Term
You put a lot of money into the property – and its value can rise or fall with the economy. Many experts believe buying a home is a great investment because it’s a fairly safe place to put your money, and home values generally increase over time. Carefully consider the options of renting vs. buying and what works best for your situation.
Buying your first home can be overwhelming. Hopefully, these tips will help you get started on the right track.