Hello and welcome back to my Home Ownership 101 series! Are you or a friend or family member a first time home buyer? Buying your first home can be a daunting experience with many concerns about how you will finance the purchase. You will need to be certain that you have enough cash to see the transaction through, that your credit score. is high enought, and what is the best way to proceed with making your home ownership dreams become a reality. Today I am sharing some tips for first time home buyers. I am also sharing some terminology that can help you understand the process better.
How Much Do You Need?
The first thing you need to consider is how much money you will need to save before you start looking at properties. It is fairly standard in the US to pay a 20% deposit, but on a house that costs just $100,000 that is $20,000 you would need.
Some lenders will now accept a smaller deposit and many of them have special deals for first-time buyers. The whole area is a very complex one though and it is advisable to speak to professionals such as Altrua to find out the best way forward for you. Once you know what you need, you can set about making it happen. If you are in debt and find yourself in a difficult position, visit DTSS to find out how they can help.
Professionals will also be able to advise you about the size and type of mortgage you should have, as this is an area of finance that can be very misleading if you do not understand all the ins and outs. There can be quite a difference in the monthly payments, for instance, between a fixed rate mortgage and a conventional one.
They may also know more about the state and federal programs that are in place to help first-time buyers get onto the property ladder.
You should also remember that there will be other costs to pay, such as legal fees and taxes. These can be quite hefty but are usually related to the price of the home you are buying. They generally work out to anything between 2% and 5% of your loan amount. There will be moving in coats to consider as well.
Preparing For Home Renovations when Buying Fixer Upper
Try to figure out the exact sum you’d like to fork out on your fixer upper. You’ll have the initial cost of the house, as well as any ongoing work you’ll likely need doing. It can be tempting to see the potential in something and ignore how much it’ll cost, but you really need to have a figure in your head if you want this to be a good idea. Even though you might be handy at DIY projects or you may be managing the project yourself, there still will be some renovations that will require a contractor, so that must be figured into your budget as well.
When you view a home, you might be focusing on the wrong aspects. If you are centering in on the decor, the furniture, the use of space or anything else subjective, you might be overlooking bigger problems. Instead focus on the fundamentals: the design of the home, the space available, the noise level from the streets or the size of the bedrooms. These are the things you will have to live. For example, no matter how much you love the idea of a big wrap around porch, if you can’t enjoy it because of noisy highway or an unsightly view, it’s best to shop around a bit more.
What Sort Of Major Repairs Are Required?
Are there any serious issues with the home that you’re going to need to fix before you can live in it? Things like water damage and foundation repair can be expensive, although they might be worth it if you have the budget for it. That being said, if you’ll need to fork out for more major repairs than you can really afford, it’s probably better to select a different house.
Problems with plumbing can be another major issue that you don’t want to miss when thinking about purchasing a new home. Contact API plumbing website or a similar resource or another reputable plumbing company to have a thorough inspection before purchasing. Other things you might want to consider are ways to get rid of the outdated piece of tech that might be raising your utility bills or simply might just be an eyesore.
How Much Mortgage Can You Raise?
This is a vital question that needs an answer, as it will be this together with your deposit that determines the price range of properties you can consider. One of the first things any mortgage lender will check is your credit rating. It could be that you have never had credit in the past, and that can be as bad as having a poor credit score. This rating gives them some idea whether you fulfill your financial obligations or not, and a good score is an important factor in your mortgage approval.
Many lenders will give you a pre-approval letter, and this can be helpful if more than one person is after the same house. This will show any seller that your finances will not be a problem, where somewhere without this will still have the processes to go through.
With your deposit and costs saved, and your mortgage ready to go, all you have to do now is find the home you want to buy. Stick to the budget you have, as exceeding it will only cause stress. If finances allow, consider a home that will allow some family growth so that if children appear at a later date, you do not have to move straight away. Lastly, never be afraid to negotiate on the price, as you could find that this means you will need to borrow less money.
I hope you have found these first time home buying tips to be helpful! Even if you aren’t buying your first home, it can still be overwhelming any time you plan to purchase a new home, but with a little planning your can turn your home dreams into reality.
Best of luck on your new home ownership adventure!