Buying your first home doesn’t have to be complicated. Our team of experts will help you navigate through the process and help you finance the home of your dreams.
Below are a few things you need to know before buying your first home:
Make Sure You’re Ready to Commit
On average, a mortgage loan term is between 15-30 years. You don’t need to stay in your home for that full length of time, but buying a home is still a big commitment. Here are 3 things you’ll need before you make a commitment:
- A stable income
- No plan to move in the next 3 years
- Having an emergency fund for at least 3 months of expenses
Prepare Your Finances
A home loan is an investment for your financial institution, just like your new home is an investment for you, so you’ll need to demonstrate financial stability. You can do this by paying down existing debit and making payments on time.
Maintain Your Credit
Avoid opening new loans or credit cards when buying your first home. When you apply for a mortgage prequalification, lenders pull your credit report and may do so again before you close on the home.
Before you begin shopping, it’s a wise decision to have a prequalified letter first. Once you have that, you’ll know exactly how much home you can afford and make a stronger offer. It also shows the seller that you’re serious about buying their property.
Hire a Realtor
Real estate agents will help you find the home of your dreams and make the homebuying process easier. They can tell you if a home is priced properly, negotiate on your behalf, and prepare the required paperwork for you. While it’s possible to do this on your own, an agent will definitely make things easier.
Don’t Skip the Inspection
It may be tempting, but don’t skimp out on a home inspection. While it will cost you, a professional will be able to point out any potential problems that could become expensive to repair down the road.
Be Prepared for Extra Expenses
You’ll need to cover more than just your down payment before buying your property; you’ll also need to take closing costs into account. These are upfront expenses that go to your lender in exchange for arranging certain loan services. Some common closing costs include pest inspection fees, appraisal fees, property taxes, escrow fees, attorney fees, and homeowners insurance. Speaking of…
Don’t Skimp on Home Insurance
Before closing the deal, you’ll want to buy homeowners insurance to cover the cost of repairing or replacing your home and belongings if they’re damaged in an incident that’s covered by the policy.
Research First-Time Homebuyer Programs
Ask a mortgage lender about your first-time home buyer options and look for programs in your state. You shouldn’t make the error of assuming that you have to delay homeownership while saving for a huge down payment. At AmFirst, we have a First-Time HomeBuyer’s Program to help our members buy a home.