It’s exciting - if overwhelming - deciding you’re ready to buy your first home. Whether you’re building equity, sick of renting, or ready to settle down, you’ve worked hard to get to this point. Here are the top five home buying tips every first-time homeowner needs to know.
#1. Start saving early and save more than you need.
There are unique loan options for first-time homebuyers that allow you to purchase a home with as little as 3% down. However, the down payment isn’t the only expense facing a first-time homeowner. When setting your savings goal for buying a home, consider these additional expenses:
Closing costs: these fees to finalize your mortgage can range from 2 to 5% of the loan amount.
Moving expenses: budget for a moving truck, movers, and setting up utilities like internet and trash collection.
Home repairs and upgrades: save a nest egg for emergency costs like plumbing or electrical repairs.
You don’t want to empty your bank account when you buy your home; keep saving past the point you need, so you’ll be secure in your new home.
#2 Strengthen your credit score.
If you’re not already tracking your credit, you need to be. It’s one of the critical factors lenders look at to determine your approval and your interest rates. Even if your credit score isn’t ideal right now, you can make small steps each month to improve it:
Make payments on time: set up automatic debits or reminders in your calendar, so you never miss a payment.
Pay more than the minimums: you save on interest and help your credit score simultaneously.
Keep balances below 30%: high ratios show irresponsible borrowing, keep your balances low, and watch your credit score soar.
Both paid and free services let you keep track of and improve your credit score.
#3. Develop a budget and stick to it.
As a first time home buyer, it’s easy to fall in love with a home and make an offer you can’t necessarily afford. Or someone might outbid you for your dream home, compelling you to make an offer outside your price range.
Pick neighborhoods within your budget: prioritize amenities you want and keep your search to affordable communities.
Look at houses below your budget: give yourself some wiggle room in case you get into a bidding war.
Remember, there’s more than your mortgage payment when you’re a homeowner, such as HOA fees, utilities, repairs, and insurance.
#4. Visit open houses.
Before you fall in love with a home, try to visit an open house, and stop by the neighborhood during different times of the day. Zillow listings are made to make the house look bigger and better than life. And while you can get a lot of information online, it won’t tell you if there are noisy neighbors, traffic, or suspicious stains on the ceiling.
#5. Speak with an experienced mortgage broker, like Atlas Crown Mortgage.
We work with over 75 lenders to negotiate the best rates and repayment options for our clients. When you’re ready to purchase your first home, Atlas Crown Mortgage has the experience and expertise to match you with the right mortgage products. Mortgage brokers are your partner in the home buying process, helping you secure financing for your dream home. They also handle the considerable paperwork involved in applying for and signing a mortgage.
Our accomplished team has worked in the industry for over 25 years, making us the trusted mortgage brokers of Phoenix and Scottsdale. We’re here to help you get reasonable financing so you can get the keys to your first home. Find out what we can do for you.