Just like winning a match, buying a new home is a moment to be proud of. For first-time buyers, purchasing a home is more than just a goal unlocked. It motivates them to do better and dream bigger.
If you’re one of those who are on the journey to become first-time buyers, below are seven helpful tips that will guide you from start to finish.
Make Sure To Start Saving Early
If you desire to buy your dream home, the best time to start saving is the earliest possible time. You need to consider three things to motivate you to regularly save:
- Down payment – Down payments are based on the mortgage type that you get from a lender. Most conventional loans require a 3% down payment. You can use a down payment calculator to determine your goal and have a target on how much you can save regularly.
- Move-in expenses – Don’t forget to save money for move-in expenses. After purchasing your home, you need to set aside money for possible furnishings, repairs, and upgrades for your home.
- Closing costs – Closing costs are expenses and fees that you need to pay after finalizing a mortgage.
Typically, it ranges from 2%-5% of the full amount of the loan. The seller can also pay a portion of the closing costs in some cases.
- Decide on your budget before looking around. Before you even start your home search, be realistic on how much you can spend for a big purchase like a house. Use a home affordability calculator that can help you determine your budget for a home based on credit score, the place you want to live, your income, and your down payment. You can also try looking for homes that you like and find out their amount. Do you think you can afford them? Doing this will give you a glimpse of how much savings you should have before making a purchase.
- Check and improve your credit score. Ask for a credit report to know your credit score. Improve your credit score to ensure that you’ll be qualified for a mortgage.
- Check your mortgage options.There are different kinds of mortgages, along with their down payment amounts and requirements for eligibility. Make sure to browse the different types of mortgages like FHA loans, USDA loans, and VA loans.
- Find reliable first-time homebuyer assistance programs. Various cities and states provide different assistance programs for first-time homebuyers. They often offer loans with low interest rates on mortgages, affordable down payment, and assistance for closing costs. There are also tax credits that are offered to first-time home buyers.
- Acquire a pre-approval letter. A lender will offer you a mortgage pre-approval letter containing the loan’s amount and terms. A pre-approval letter can help you give real estate agents and home sellers an impression that you are a serious home buyer. This can be your edge over other buyers who do not secure a pre-approval letter. Start applying for a pre-approval letter when you’re ready to buy a home. Meanwhile, the lender will start checking your credit and reviewing all your proofs of income, debt, and assets, so it pays to have a good credit score.
- Choose a reliable and trustworthy real estate agent. A real estate agent will be responsible for finding the home that fits your requirements. They will effectively guide you through the process of negotiation up to the closing process. Jared Lincoln of Mortgage City quoted: “It’s not easy to find a reliable and trustworthy real estate agent. You need to get referrals from other buyers who have made successful purchases with the help of good real estate agents. Don’t hesitate to ask queries to your real estate agent about their experience in assisting their clients in purchasing a new home.”
Home Buying in Michigan with Mortgage City
Acquiring a home as a first-time buyer can be both a rewarding and daunting process. There are various factors to be considered. With the right knowledge and budget, you’ll get your dream home easily. Make sure to look for reputable companies offering loan assistance for a more convenient process.
If you are a first-time home buyer in Royal Oak, MI, let Mortgage City assist you in finding the right loan for you. We’ll make your first home buying journey a hassle-free one. Call (248) 930-8709 for a free mortgage rate quote!
