Buying a home is truly a daunting process. There are so many different steps and often hoops to jump through. If you’re a first-time home buyer, it can seem really stressful. However, if you keep yourself informed, you will be able to save money and avoid some really common mistakes that most first-time home buyers make.
Even if you have a great realtor and mortgage banker, it can’t hurt to educate yourself. Here are some of the most helpful tips for first-time home buyers to learn about the entire process and navigate new territory with ease:
1. Start saving as soon as possible
There are so many different expenses when it comes to buying a home. A first-time home buyer probably doesn’t realize that there are down payment costs, closing costs, inspection costs, and much more. Save your money, the more you have… the less stressed you will feel. Many people put 20% down on a home, but many lenders will let you put as low as 3% down or even less. Even so, it can still be costly.
2. Learn about different mortgages as a first-time home buyer
There are several different types of mortgages and each has pros and cons. First, there is a conventional mortgage, which is the most common and sought after. They have standards that are set by government-sponsored entities. You can get a conventional mortgage for as little as 3% down.
Next, there are FHA loans which are insured by the Federal Housing Administration and can be as low as 3.5%. Lastly, there are VA loans which are insured by the Department of Veterans Affairs. If you are a veteran, this would be a good option for you because sometimes there is no down payment required at all. J.G. Wentworth is a great tool to use to help you find out which loan you should use and how much you can put down on a home. Learn About Different Mortgages 🤔
3. When you start the process, don’t apply for new credit
Make sure you check your credit score and know that your lender will be checking it as well. You will have to give them pretty much every piece of financial information from the last few years. Before you start your process of finding a home, you may want to check your credit and see if you can improve it first. When you are in the process, you will be advised not to open any new lines of credit for a month or more. Keep this in mind. If you need to check your credit, try using a free service like LendingTree to help you out! Learn More About Lending Tree Now!
4. Get a pre-approval letter
After you’ve improved your credit and shopped around for mortgages, get a pre-approval letter to help you search for homes in your budget. Quicken Loans can help you get a pre-approval letter very quickly so you can move on to the fun part, which is looking at potential homes! When you have a pre-approval letter, you look more serious to sellers and can move more quickly once you found a home you love. Get Your Pre-Approval Letter Here!
5. Head to lots of open houses
It can be difficult to take time out of your busy schedule to tour a lot of different homes when you’re ready to start looking. It can seem stressful for a first-time home buyer as well. Take advantage of open houses. You will get to ask questions about the home and often they give out a sheet with all of the home’s details.
If you’re a first-time home buyer, we hope that these tips can help make the process easier for you! Best of luck in finding your dream home!