Buying a home is a huge decision and responsibility. Check out these tips before buying your first home!
Homes have been selling for above asking price, and buyers have been bidding against each other since early last year. It’s truly become a competitive space that first-time homebuyers may find intimidating. But there are ways to get yourself ready for the bidding war. Here are some tips for first-time home buyers.
Things to remember for first time home buyers
We’ve compiled here a list of tips to help you navigate this housing market. Take note and keep learning.
Determine your budget
Know your financial limit before you start looking for the home you want. Think of how much of a downpayment you can afford and how much you’ll need to finance. The rule of thumb is to not spend over 28% of your income on housing-related payments every month. Look for a mortgage calculator to see if the home’s price fits your budget.
Be fully committed to a loan
A house loan is a long-term plan, and on average, it takes about 15-30 years. Ask yourself if you will stay in your home for the next five to ten years, have enough emergency funds to cover your expenses, and have a stable income. If you’re unsure, it’s best to put your plans on hold and revisit it when you’re more financially ready. Take your monthly expenses, your income, and your safety net into account before closing on a home loan.
Save up for a downpayment
The key to more straightforward and quicker approval is to show your mortgage lender that you can pay up for the long run. It’s why your downpayment is a critical part of the process. The more money you save for the down payment, the better interest rate and terms you’ll get.
Don’t skip the mortgage pre-approval process. Don’t confuse pre-qualification with pre-approval. Prequalification is the estimate of the amount of home loan you can get based on your income evaluation. On the other hand, pre-approval is a document from your lender that dictates the amount of financing you can get based on several factors, including your W-2s, credit score, and bank statement.
The preapproval helps determine if you can afford the house you want, and it takes out any financial surprises along the way.
Your home is an investment. You need to explore your options to see which one fits your budget, needs, and lifestyle. Once you’re done with all these, your next step is to protect your investment. There are various ways to do that. You can schedule regular maintenance, pay for the mortgage regularly, and get your home insured. Check out your homeowner’s insurance options. Give us a call today! We’d be more than happy to help.