With so many different aspects to consider, buying a home can be extremely intimidating. Hoping to make the journey a little less nerve-wracking, here are a list of tips for first-time home buyers.
Mortgage Application and Down Payment Tips
1. First things first, determine your price range
Before you start looking for homes, it is important to calculate what homes are actually in your price range. There are home affordability calculators online that can help you with the process. These home affordability calculators will take your annual income, monetary obligations, and credit score into consideration. After getting the necessary information, it will give you the price of homes you can afford and a break-down of your monthly payments.
2. Check your credit score but with precaution
During the home buying process, your credit will affect a couple of different aspects of your mortgage loans. First of all, your credit score is the leading factor contributing to approval or disapproval of your loan. It also affects the quality of your interest rates and could even influence the term of the loan. Your credit is important so it is key to continue to make steps in approving it and making sure it does not unnecessarily get docked. In order to prevent your credit score to drop, prevent opening up new credit accounts. Another important thing to note is that your credit score can suffer if your report is pulled too many times. This can become a problem when dealing with mortgage applications. A tip is to pull your own credit report and bring it to lenders to get informal rate quotes. Once ready to apply, your lender will need to officially pull it but you can avoid having it repeatedly pulled.
3. Start saving for a down payment as soon as possible
It is very common that home buyers pay 20% of the total cost of their new home upfront but some lenders require far less than that. For first-time home buyers, some lenders ask for as little as a 3% down payment. The cheaper down payment does not necessarily mean that it is the best fit for you; these low down payments can lead to higher monthly payments and a required mortgage insurance. But even low down payments can put quite the dent in your bank account. To make the whole process easier, begin saving when you can to buy a home that meets all your needs and more!
4. Explore mortgage loan options
With so many different home loans offered, it can be confusing to know which one you would benefit from most! There are an array of mortgage loan options out there, including conventional mortgages, FHA loans, and VA loans. To learn more about these individual loans and whether or not they would be a good fit for you, check out my informational blog post, The Basics of Home Loans.
Home Browsing and Buying Tips
5. Hire a fitting real estate agent
When in the process of home shopping, you will be spending a great deal of time with your real estate agent so it is important that you all get along well. A good real estate agent is a efficient communicator, proactive, a good listener, and is client-motivated. MüvzU is a platform which can connect you to amazing real estate agents in your area!
6. Do Research on Homes and Neighborhoods
It is important that you get all you need from your home. Even if your house checks all of your requirements, you need to look into the neighborhood you are buying in too. Research crime rates and consider mapping out important routes (grocery stores, hospitals, etc.). I would also research aspects of the neighborhood that affects home value, like schools. Your neighborhood is going to influence you and your life in so many ways. It is extremely important to take the time to consider all aspects of a neighborhood before fully committing to your potential home.
7. Buy a home that will fit your future
If you want to stay in your home for a significant amount of time, you should also consider your plans for the future. Of course, the house should meet all of your current requirements but thinking ahead can save you a lot of hassle. For example, if you want a family, you probably would want to buy a home that you are able to grow into. Again, thinking ahead can save you the hassle of another move, especially if you love the neighborhood you are in!
We are so excited for your home-buying journey and MüvzU has even more to offer! The goal of MüvzU is to connect people to local and trusted home service professionals in the most convenient way. Without giving out your personal information, MüvzU makes searching for professionals in buying and selling painless. Happy shopping!