You are ready to make a big purchase. You have completed your education. You studied hard. You got that full-time job. You put in the hours, and now you are ready. You are going to purchase your first home. This milestone is huge. The accomplishment is great. You are proud of what you have accomplished and the purchase you are about to make. The process is one you are new to, so you want to get it right.
Buying your first home can be overwhelming. You will want to make sure you are prepared for the process that is about to take place.
Get your finances in order.
You will want to check your credit score. Know what your score is, and how it can influence your loan amount and buying power. If your score is lower than you’d like it to be, you can take steps to increase your score. While in the process of getting a lender and buying the home, you probably won’t want to open any new accounts that will show on your credit report. You will want to budget and save. You will need to figure out how much you can afford as a monthly payment. Make sure to factor in other expenses, such as utilities, maintenance and possible HOA fees. Lastly, you will want to save for your down payment. See how the amount you put down can have an effect on monthly loan rates.
Know your mortgage options.
Deciding what mortgage is best for you is important. There are different lengths of mortgages available. If you want to pay off your mortgage quicker, and have the means to do so, you may consider taking a shorter loan. You can look into fixed-rate mortgages and adjustable-rate mortgages. Fixed-rate mortgages are more common because they pose less risk. An adjustable-rate mortgage may give you a lower interest rate in the first years of the mortgage, and may be an advantage to you. You will want to get quotes and compare lenders. Interest rates can vary. Don’t go with the first lender to reply to an inquiry. As you search, keep in mind that if a lender runs your credit, it can result in a hard hit on your credit report, and may influence your score. Get a pre-approval letter from your preferred lender when you start to look at homes.
When in doubt?
If you are confused or have any questions throughout the process, ask them. Do not wait and do not let your questions be ignored. You may want to hire a professional to assist you in your home-buying process. A skilled lawyer may save you from making any mistakes. Do your research. Look at comparable houses and pay attention to the market.