A home is a significant purchase. When a person is buying their first house, they may feel overwhelmed. The following tips will help them navigate the process and make this purchase successfully.
Savings
Before anyone thinks about buying a home or seeking help from Del Mar Mortgage, they need to save money. People often focus on the monthly mortgage payment, homeowners insurance, and real estate taxes. They know they need a down payment to purchase a home, but they forget about other expenses they may incur during this process.
Moving expenses are a significant factor when purchasing a home. Moving costs can run in the thousands of dollars, even for a local move. If a person is moving long distances, the price will rise significantly. In addition, a person must save for home furnishings, utility connection fees, and other expenses that come with purchasing a house. When a person has money saved for these expenses, the move will go much smoother, and there will be less stress.
Don’t Overbuy
Many new home buyers are excited to see how much they qualify for with various lenders. However, this doesn’t mean a person should spend that much on a new home. They must ensure they can afford everything related to owning the house, including repairs and maintenance. Extra monthly money will be greatly appreciated when someone owns a home because they won’t be so stressed when unexpected expenses arise.
Mortgage Options
Every home buyer should consider all mortgage options before choosing a lender and a mortgage. Many people look at conventional mortgages and don’t consider the other options. FHA Loans are an option with down payments as little as 3.5%. Suburban and rural homeowners may qualify for a USDA loan that requires no down payment, while service members may benefit from a VA loan.
Furthermore, home buyers may choose from a fixed-rate loan or an adjustable-rate mortgage. They can also decide how long they want to hold the mortgage. Some people take out a 30-year mortgage, but others opt for a 15-year loan because the interest rate is lower. Researching all options ensures a home buyer finds the loan that meets their unique needs.
Compare Lenders
Once a person chooses which type of mortgage they plan to get, they must compare lenders. Every home buyer should check the rates from three separate lenders, if not more. According to the Consumer Financial Protection Bureau, a borrower should ask for a loan estimate for the same type of mortgage from three to five lenders. When reviewing these offers, the borrower needs to look at interest rates, origination fees, and other fees charged.
Pre-Approval
Every home buyer should get pre-approval before looking for a house. This pre-approval letter demonstrates that the buyer is serious about purchasing a home. It gives them a competitive edge over those who haven’t obtained pre-approval. The seller knows there won’t be issues with financing, thanks to the buyer taking this step before looking for a house.
One of the most important things a first-time home buyer can do is set a house purchase budget. Experts recommend that people look for homes below what they can afford. They then have room to negotiate with the seller on price. In addition, if a bidding war arises, they can raise the offer without exceeding the budgeted amount. Having a budget helps remove a person’s emotions from the equation. They are less likely to over-buy and find themselves financially strapped every month. That’s the most important thing.
