5 Tips for First Time Home Buyers

Buying a home for the first time can seem like an overwhelming and daunting task. It can be difficult to know where to start and how to achieve your home goals. These simple steps can help you make the right steps towards your dream home.

Figure out a Budget

When planning to buy a house, you should plan on putting 10 to 20 percent down when purchasing a home. Some loans will allow you to put down as little as 3 percent but take into consideration that a lower down payment requires mortgage insurance. There are ways to plan and save for your down payment ahead of time to make the buying process easier later on. You should also budget for closing costs, relocation expenses, and furniture. Take into account your current income, savings, assets, and debts to get an idea of how much home you can afford.

Financial advisors recommend you allot 30 percent of your income to your monthly housing costs, which includes your mortgage payment, monthly utilities, and repairs. This way you can plan how much of a monthly mortgage you can afford once you are in the house.

Get Pre Approved

Getting pre-approved before you start house hunting shows you what your home buying power is. This can give you a realistic price range you can afford with your current financial situation. Having a pre-approval will show lenders you have the necessary income and savings to be able to afford the upfront costs of a home and monthly mortgage payments. A lot of the required documentation you will provide for a pre approval will be similar to those you will need for the loan process later on, which can help you prepare your documents ahead of time.

Research Loan Options

There are many home loan options available and lenders to choose from, so make sure you study your loan options before making a decision. The Federal Trade Commission recommends comparing at least three loan options before settling on one. If you are a veteran, you may want to look into VA mortgage rates online, since VA loans offer lower rates and lower closing costs. The Federal Housing Administration (FHA) loan programs are a good option for first home buyers. Take into consideration how long you plan to live in your home, what loan length works for you, and which loan type better fits your financial situation.

Buy for Growth

When looking for the right home, keep in mind what your future plans hold. If you want to grow your family, look into buying a home with more room or a yard. You should also consider the external environment of the home you live in. Make sure the neighborhood and school district you move to work with you and your family’s needs.

Visit Properties in Person

Before falling in love with a home you find online, you should visit the home in person. Better yet, visit multiple homes in person to see what features you love and hate. Pictures online can’t show you how the home smells, what the neighborhood is like, and how the pictures measure up in real life. This is where finding the right realtor is important because they can help you see the homes you like to make it easier to weed out the duds and pick your dream home.