Ready to buy your first house? It is definitely a big challenge, but a very important decision to make and a thrilling adventure.
Therefore, considering the best advice will always be very helpful. Here we listed down the Top Tips you, as a First Time Home Buyer, should consider:
Make your Down Payment High as possible
It sounds almost impossible to not get a mortgage to buy a first home. But If you are already thinking about buying a house, starting to save in advance is always very helpful when it comes to doing the down payment.
Check your credit
The homebuyer’s credit score is among the most important factors when it comes to qualifying for a loan these days.-BankRate
“In addition, the standards are higher in terms of what score you need and how it affects the cost of the loan,” says Mike Winesburg, formerly a mortgage planner with McKinley Carter Wealth Services in Wheeling, West Virginia.
DO IT FOR FREE: Go to myBankrate to collect your credit report and score today, free and with no obligation.
Build your emergency fund
When you’re a first-time home buyer, it’s easy to be shocked by the many “extras” that appear in your monthly budget. Things that didn’t exist before – like larger utility bills, home repairs, and lawn maintenance – start adding up and making a huge difference in your bottom line.
If you want to be as prepared as possible, build your emergency fund for several months – or even years – before you commit to the home buying process. The money will be there when you need it that way, which will make the entire purchase a lot less stressful.-The Simple Dollar
When applying for mortgages, homebuyers must document income and taxes. And getting all papers organized may seem simple, but organization is the key. Typically, mortgage lenders will request 2 recent pay stubs, the previous 2 years’ W-2s, tax returns and the past 2 months of bank statements.
Buying a home can take a long time, but knowing what you need and where to find it can save time when you’re ready.-BankRate
Pay down your debts
Not only can paying down debt improve your credit score, it can increase your chances of getting qualified for a mortgage — and improve your financial well-being, too. Once you owe less money, you should have more expendable income each month that you couldsave for your new home’s down payment – or for repairs or upgrades once you move in.
Paying down your debts can also help you qualify for a mortgage, since lenders prefer to have your total debt obligations — including your new mortgage — to represent no more than 43% of your income.
Avoid new debts
Another piece of the puzzle while you’re preparing for a mortgage is staying away from new debts. Remember, any monthly obligations you have could stand in the way of taking out a mortgage for the home you really want to buy. As you prepare to buy a new home, try to stay away from taking out any new loans, including car loans. You’ll be in a much better place to get your ideal mortgage, and ideal mortgage terms, if you are debt-free.- The Simple Dollar
Buy the correct homeowners insurance
Your search shouldn’t just be for the cheapest policy you can find; this is likely the biggest investment you’ll ever make, so you want a high-quality policy that will serve its purpose if you should ever need it. So don’t shop just on price alone – consider the quality of the policy and its coverage options. If you ever need to file a claim, you’ll be glad you did.-The Simple Dollar
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By: Andrea Bogarin-Ackerman