5 Tips For First Time Home Buyers

5 Tips For First Time Home Buyers

Start saving for a down deposit

It’s common to put 20% down, but many lenders now permit much less, and first time home buyer programs allow as little as 3% down. But on the other hand, putting down less than 20% could mean higher payments.

You can always find a down payment calculator online to help you figure out where you need to be. To reach your goal you can set aside tax refunds or work bonuses and set up a savings plan.

Budget For Closing Costs

In addition to saving for a down payment, you will need to budget for closing your mortgage, which can be a hefty price. You can do some research and compare prices for different closing costs, such as homeowners insurance, home inspections and title searches.

Credit

When taking out a mortgage loan, your credit will be a very important factor in whether you get approved or not. It will also determine your interest rate as well as loan terms.

With this said, it is important that you know where your credit is at and if it will need some work before taking out a loan. You can take this time to dispute any errors that may be negatively affecting your credit score or make payments towards any outstanding debts.

Also, if you’re applying for a mortgage soon, avoid opening new credit accounts to keep your score from dropping. Anytime you open a new credit account, the lender runs a hard inquiry, which can temporarily affect your credit.

Negotiate

Most people find negotiating to be very uncomfortable, but it can result in major savings. When looking at the home, be sure to look thoroughly for any major repairs, its possible the seller might cover them or give you a credit adjustment at closing. Will the seller pay for any of the closing costs? Some sellers are willing to bargain and if you never ask you’ll never know! If you’re curious about how to get your home sold fast, you can visit our page about that.

Avoid a Bidding War

If the market is competitive with limited inventory, the chance of you bidding on a house that has multiple offers is very high. It’s very tempting to make a high price offer when you find a home that you love, but don’t let the emotions get the better of you. Stick to your budget. You don’t want to get stuck with high mortgage payments that you can’t afford.