Ready to get on the property ladder? Congratulations! Becoming a homeowner is a life-changing event and could open up a world of opportunities to you in the future. Buying a home is also likely to be the most significant purchase that you make during your lifetime, so preparation is essential to make sure that you are investing your money wisely, can afford the cost of your mortgage, and aren’t paying out unnecessarily. With a little groundwork, you can avoid many of the traps that can befall first time buyers. You could even save a few dollars too!
Here are our most valuable top tips for first time home buyers.
Ramp Up Your Credit Rating
Unless you are fortunate enough to buy a home in cash, you’ll almost certainly be taking out a homeowner loan to fund your purchase. One of the things that will influence your ability to get the loan you need is your credit rating. This is the magic number that tells lenders how reliable you are likely to be when making repayments. The better your credit rating, the better the interest rate on your mortgage you are likely to be offered. This could save you thousands or even tens of thousands of dollars over the course of your mortgage.
Save for the Biggest Down Payment Possible
Saving for a down payment can be hard work, but the more you can put by for a deposit, the better the position you will be in when it comes to securing your homeowner loan. Borrowing less will mean that you end up repaying less in the way of interest too so don’t stick with the lowest down payment you can manage. If you can save an extra 5 or 10% - do it!
See if you Qualify for Assistance
Although not everyone will qualify, most states offer assistance programs for first-time buyers that come with a range of benefits such as down-payment assistance, closing costs assistance, and even discounted interest rates. Make sure you check if there are any schemes or programs that can support you in your first ever property purchase – they could help you to save a considerable amount of money that you can put towards making your new home your own.
Don’t Forget to Factor in Additional Costs
The sale price of your new home may be your most considerable expense, but it certainly won’t be the only one. Closing costs, which could include loan origination fees, appraisal fees, title searches, surveys, credit report charges, and, of course, taxes, will make up just some of the additional costs that you will incur. Exactly how much you will need to allow for will depend on your circumstances, but typically home buyers will pay between 2-5% of the purchase price of their property in closing fees.
Compare Homeowner Loan Interest Rates
One of the biggest mistakes made by first-time buyers is failing to shop around for their homeowner loan. Every lender is different, and it might surprise you just how much their deals can vary. Studies show that comparing mortgage rates from at least three lenders can save you as much as $3,500 during the first five years of your loan.
Get Pre-Approved for Your Homeowner Loan
Once you have chosen a lender, you can get them to pre-approve your homeowner loan. This shows that you have been offered the money needed to purchase your property and will make you a better potential buyer if there are multiple bids on the property that you want to secure. It will also let you know where to set your budget when searching for properties to buy.
Hire a Realtor
Hiring a realtor is one of the most valuable things that you can do when it comes to buying your first home. A great realtor has extensive experience of buying and selling homes, as well as crucial local knowledge about the area and the market there. They will be able to help you to find the perfect property and guide you through the process while ensuring that you aren’t paying over the odds for it.
For more first time home buyer tips, please get in touch with our expert real estate team in San Antonio TX.