Buying a home is one of the biggest things to do in life. If you are a first-time buyer there are several things to consider and below are some tips from experts in the industry:
Save for down payment
You need to pay about 20 percent of the flat or home price as downpayment and so it is suggested to start saving for it early. Some lenders have started letting you pay less downpayment like as little as 3 percent, but know that even 5 to 10 percent may be hefty for you.
Before buying a home you must check your credit as this will be one of the key factors for finance approval. Solve errors or disputes which are slowing down your credit score.
Stop taking new credit
Just ahead of buying a house it is not suggested to take new credit. Try to put a pause to any new credit activity like auto loan or new credit card. You should not even new credit accounts.
Determine your home budget
Try to find out such home which is in your budget. Always remain within your affordability as there will be monthly liability for long term.
There are several options for first-time home buyer if the usual downpayment seems to be too high for you. There are programs like federal mortgage programs that offers as low as 3 percent downpayment option.
Research assistance programs
There may be couple of federal programs in your state for first-time home buyers. Try to explore those. They may offer you perks like tax credits, interest-free loans or low downpayment option. You can also check for similar programs at your county or municipality.
Closing cost budget
Money is also required for closing the mortgage and the closing cost is significant. It is somewhere between 2 percent to 5 percent of the loan amount. You should budget this too in advance before buying home.
The move-in costs is significant too and it is suggested to set aside some money for it. After you have saved money for downpayment and budgeted the closing costs, it is important to save some buffer money required for shifting.
Type of property
The type of property should be as per your need. If you are a nuclear family, it is suggested to opt for a single-family home. If you require lot of room, go for some spacious home.
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