When you choose to buy a home, you are making what will probably be the biggest decision and most expensive purchase of your entire life so far. If this is your first step onto the property ladder, you are probably overwhelmed with the sheer amount of information and the number of steps needed to take to get yourself ready to purchase your first-ever home.
Putting a substantial down payment together will help to reduce the amount that you need to borrow and therefore your liability. This could secure a lower interest rate that saves you thousands of dollars over the course of your mortgage. However, ideally, first-time buyers need at least 10% of the purchase price of their property, but check with your lender.
One of the biggest mistakes of first-time homebuyers is underestimating the number of costs involved in the process. As well as saving and providing as big a down payment as possible, you should also expect to stump up for various taxes, fees, and other charges that can soon make the purchasing process much more expensive than you anticipated. For this reason, we strongly recommend that you save as much money as you can before you get started.
Getting a mortgage is often the biggest hurdle in buying a home. Even if you have a significant deposit, lenders will also look at your income and your credit score to determine how reliable you are likely to be in paying back your homeowner loan. The better the numbers stack up, the lower the interest rate you are likely to be offered and this could save you a small fortune over the course of your mortgage. If you are worried about your credit score, it’s worth speaking to a financial adviser ahead of applying to lenders. They will be able to tell you what your current credit score is and advise you how you can improve it.
Getting on the property ladder is far from easy, but many states are keen to push for homeownership, and as a result, have created assistance programs that could help first time buyers make the leap to becoming homeowners. Ask around real estate agents in your area and see if there is any support that you qualify for.
Once you’ve got your finances in order, it’s a great idea to get your mortgage approved in principle. This will show homeowners that you have a mortgage secured (subject to a home valuation) and this could make you a more attractive buyer than someone who hasn’t secured pre-approval at the time of making an offer. This is important when there is high demand and low supply, as is the case in many areas of the United States right now.
Getting preapproved will also give you an approximate figure that you can use as your budget when you are narrowing down potential properties for your first home.
Buying a home is a nerve-wracking process for anyone, but especially for first time homeowners. Fortunately, help is at hand. A realtor is a very valuable source of information and support for any property purchase. For first time buyers, your realtor can handhold through the entire homebuying experience, leveraging their skill and experience to find you the perfect property at the right price point for your budget.
A great realtor will be aware of the current market in your area, will know how much homes are worth and will help you to figure out what to offer, keeping your feet on the ground and preventing your heart from ruling your head on financial decisions. With an experienced realtor by your side, buying your first home doesn’t have to be a particularly stressful or nerve-wracking experience.
If you would like more tips for first time home buyers, call Vincent Morris Team at our office in Encinitas, California. You can call (760) 249-7654 today to schedule an appointment.