5 Tips for First Time Homebuyers in 2021

Regina Thomas https://thebasispoint.com/housing 3m 787 #homebuyer

The views of this article are the perspective of the author and may not be reflective of Confessions of the Professions.

My Image Source: Envato

Purchasing a home is an important milestone in life. Whether you’re starting a family or a new career, or you’re moving to a new city or state, a new home can make these moments in your life especially memorable. If you’re embarking on this venture for the first time, you may be overwhelmed when it comes to following the right steps to become a homeowner. To make this process as seamless as possible, here are five things to keep in mind so you can accomplish the goal of owning your own home.

Start Saving Money as Early as Possible

If you’re buying a home, you’ll need to save money for a down payment. The amount of the down payment depends on the type of mortgage you select, as well as the mortgage lender. If you’re purchasing a home for the first time and you have good credit, you could pay as little as 3% down. Keep in mind that even if your down payment is small, it may still be a challenge to save money for this expense. For instance, if your down payment is 3% of a $300,000 home, you’ll have to save $9,000. You can use a down payment calculator to help you keep track of your goal and set up automatic transfers from your checking account to your savings account to make sure you have enough for your down payment.

It’s also important to save money for closing costs. Closing costs are the fees you pay in the final stages of your mortgage approval, and they are usually between 2-5% of the total amount of the mortgage loan. In some cases, you may be able to ask the home seller to take care of the closing costs.

Don’t forget that you’ll also need to set some money aside for your move-in expenses. You’ll need to have cash on hand after you move in for any repairs or upgrades you want to take care of right away, or for furniture items that will make your new home more comfortable.

Check and Improve Your Credit

Your credit score is the biggest factor to determine if you qualify for a mortgage. Your score also affects the interest rate you’re entitled to. This is why it’s important to get your score as high as possible.

Make sure you get copies of your credit reports from Experian, Equifax, and TransUnion, and make sure you dispute any errors that could bring your score down. Keep your credit card balance low and pay your bills on time. Instead of closing your credit cards, keep them open so you’ll still have available credit, which can keep your score from dropping.

Research Your Mortgage Options

It’s important to know which mortgage will work best for you. You can stay current on housing market news to see which lenders would be a great fit for you. Make sure you know how much of a down payment is required and which additional eligibility requirements you have to meet. If you’re applying for a conventional mortgage, you may pay about 3% in a down payment. If you apply for an FHA loan your down payment could be around 3.5%. If you’re moving to a rural area, you may be eligible for a USDA loan, and you may not have to come up with a down payment. You’ll also forego the down payment if you’re approved for a VA loan.

Make sure you know the terms of the mortgage as well. In most cases, your mortgage lasts for 30 years at a fixed rate. Your interest rate will be lower if you opt for a 15-year mortgage, but your monthly payments will be higher.

Take a Look at Buyer Assistance Programs

Depending on the city or state where you want to purchase your home, you may be able to apply for a first-time homebuyer program. The program will combine a mortgage with a low-interest rate with a down payment and closing cost assistance. Research programs in your area to see how you can get the assistance you need to get into the home you’ve always wanted.

Choose Your Real Estate Agent Wisely

Make sure you choose a real estate agent who will research the market for the home that is right for you. Your agent should also assist you in the negotiation and closing. Talk to your friends or family members to get recommendations for a qualified real estate agent who will make home buying easier for you.

These tips will help you get into the home of your dreams. While the journey to homeownership is different for everyone, if you follow these guidelines, you can make your dream of owning a home a reality while keeping your finances intact.

(