Tuesday March 1, 2022
Buying a home is a lifetime investment, and it should not be done without preparation. First-time homebuyers can find the process of buying a house complicated and daunting. However, if you research thoroughly, seek professional help, and ask questions, you can make the right choice. Here are crucial things you should do before buying a house:
Improve Your Credit Score
Your lifestyle, income, assets, and debt determine how much you can afford as a mortgage payment. Also, check your credit score to determine how much you can afford. A low credit score translates to higher interest rates on your mortgage and vice versa. A good credit score is higher than 720. However, there are loan programs available for those with credit scores less than 720 that help make home buying attainable.
Determine What You Can Afford
Here are some of the ways to determine the home you can afford:
- FHA loan – your monthly house payment should not exceed 31% of your monthly income
- Conventional loans – your monthly expenses should not exceed 28% of your gross monthly income
First-time home buyers are advised to seek professional help to figure out what they can afford beforehand. To get the best financing/mortgage loans in the real estate market today, thorough research is required.
Save Money for Down Payment and Closing Costs
Once you have an idea of the price of the home or monthly mortgage payment that you can comfortably afford, and depending on your pre-qualification status, you may need to save between 3% and 20% of the total house price for your house's down payment. Remember, the loan terms and credit history can determine the amount of money you need for a down payment.
Create a Saving Account
Although a saving account comes in handy when buying a home, the money can be used to pay for repairs and maintenance of your new home. Most lenders investigate potential homeowners and can determine by their spending habits, account balance, and credit card balances if they live paycheck to paycheck. You become a better loan candidate if you have a cash cushion and credit reserves.
Buying a house is a convoluted process that can be confusing and mired in detail, sorting through this process requires time, patience, and dedication. Therefore, take your time to research the neighborhood, area amenities, schools, ways to get around, etc. With such information, you can ask Landmark 24 Homes agents questions and get any clarification before buying a house.
A home inspection is always advised, especially when buying an older home. This is crucial because hidden costs of homeownership are almost always wrapped up in repairs and maintenance. Hiring a professional home inspector can help you determine any underlying problems before closing on a home.
New homes are built according to updated building codes and materials. They must pass a series of inspections throughout the building process before getting a Certificate of Occupancy. However, many new homeowners want the assurance of the quality of their new home and hire a home inspector to help give them peace of home in their investment.
Are You a Potential First-Time Home Buyer? Get in Touch Now!
Learn more about the properties we have available or speak to one of our preferred lenders to get pre-qualified and see what financing options and loan programs are available for your specific needs Contact us today!