5 Tips For First Time Home Buyers
1. FIND THE RIGHT HOME FOR YOU
Before a prospective homeowner can begin the quest towards purchasing a home, there are many factors to consider, most of which are determined by some basic facts and assumptions.
- How big is your family?
- What neighborhoods are you willing to consider?
- Are schools a factor?
- Based on your income and assets, what kind of home can you afford?
2. SAVE FOR A DOWN PAYMENT
Nearly all mortgage loans and lenders require some amount of cash as a down payment. The amount you’ve set aside for this will determine the kind of mortgage you qualify for. It will also impact how much you can afford to borrow for a home.
3. CALCULATE WHAT YOU CAN AFFORD
Consider Your Income
Many banks will require that your monthly costs can’t exceed a percentage of your income (for example 25-28%).
Consider Your Debts
In addition to your income, if you have recurring debts, the total monthly payments on existing debt plus new payments for your mortgage may not be allowed to exceed a certain threshold (for example 41%).
Consider the Down Payment
Most lenders prefer a down payment of 20% or higher to qualify for a conventional loan, but there are loan options where you can put down less. We have plenty of houses under our listings only require 10% email us on firstname.lastname@example.org
However, you should be aware that with a smaller down payment, you’ll likely be required to pay for mortgage insurance, and your loan application will be subject to greater scrutiny.
4. COMPARE MORTGAGE LENDERS
One of the number 1 mistakes made by home buyers is NOT shopping around for a mortgage! Your Realtor knows a guy, or maybe your parents used a mortgage broker in the past.
5. GET PRE-QUALIFIED
By this point, you should have a pretty good idea about what kind of home you’re looking for, and the neighborhood you’d like to live in.
You also know how much you’ve saved for a down payment, which in turn will determine the type of loan you should pursue. If you’ve compared a few rates you should request a pre-qualification letter.