After much contemplation, it is finally time — you want to buy your first home. Congratulations! This is an exciting time in your life as it will be the first place you grow roots and make a large investment. I have helped many first-time buyers as a real estate agent and through this experience, have picked up lots of tips first-time buyers, like yourself, seek when they are going through the process.
Below I map out my top 5 tips. For more, feel free to contact me today!
1. Save for a down payment.
There are many factors that go into the down payment of a home, but for simplicity sake, know that the cost of the down payment ultimately depends on the loan type.
While the minimum down payment you need is 3.5% (with an FHA loan for example) any real estate expert will tell you to save a minimum of 5% of the cost of the house in cash so that you can qualify for a conventional loan.
Note that if you put down a percentage lower than 20% on the conventional loan, you will need to also pay mortgage insurance — an insurance that protects the lender if you choose to stop paying your loan. That said, if you are able to put down more than 20%, your monthly mortgage payment will cost less.
I am happy to walk you through your options for a down payment. Find my contact information above or below this post.
2. Check your credit!
What credit score you need will depend heavily on the type of loan you qualify for. Without making things too complicated, let’s pretend you have a conventional loan that’s backed by Fannie Mae and Freddie Mac (federal mortgage enterprises). In this case, the minimum score you will need is 620. Note that most lenders require a score between 620 and 640. However, it is possible to buy a home with a score of 580 if you have what’s called an FHA (Federal Housing Administration) loan.
Professionals in the real estate industry are trained to help you check your credit score and determine the next nest steps. Seek guidance, as there are many options, regardless of your credit score.
3. Determine the type of home you want.
This one might seem like a no brainer, but it’s important to truly consider. Do you see yourself growing a family in your first home? If so, you will need to find a home that has the right number of bedrooms, bathrooms etc. Also keep in mind the type neighborhood — is there a good school or park close by for kids?
The type of home you want will also depend on the type of home you can afford. Take the time to calculate everything from the upfront costs (like down payment and closing costs) to the monthly costs (such as mortgage and home maintenance). This will help narrow down or broaden the neighborhoods and types of homes you can look at with your real estate agent by your side.
4. Save money for moving costs.
There are certain costs many first-time buyers don’t consider when diving in to buy a home — saving money for moving costs is one of them. This tip is as simple as doing your research to understand how much it would cost to hire a moving service or if it would be cheaper to ask a friend and do it yourself! If you are new to the area or have never done a move before, a real estate agent is a great resource as he or she has already given moving recommendations to past clients.
5. Refer to a realtor for all your needs!
Pretty much every tip above ties in to having the help of a real estate agent to guide you and your first home purchase in the right direction. I have been in this industry for many years and my job is to have the solutions to all of the above. Leave it to the professionals and contact me today to get started on buying your first home!