Buying your first home can be a stressful and challenging experience, but it can also be very rewarding. Unless you have a lot cash on hand, you may have to go through a bit of a process to buy your first home. A little guidance through this process can help save you a lot of headaches and confusion. The process involves getting preapproved for a mortgage, finding the right home for you, getting a loan, negotiating the deal and closing the deal.
The process can be overwhelming but can also be broken down into small steps. You can then take your time to ensure you don’t make any mistakes. Buying a house is an emotional as well as financial commitment. The process is easier if you know what you are up against.
Get a trusted realtor
Most people make the mistake of using any realtor in the area. When choosing a realtor, it’s okay to be a little picky. Buying a house isn’t an easy task. It involves a series of complicated transactions. A trusted and experienced realtor will be there for you and knows all the challenges and benefits of the market and they will guide you all the way. Try to find a realtor with a good reputation who will put your needs first.
Are you ready to buy the house?
Your mortgage payment can be the same or even less than your rent payment so buying a home can make a lot of sense. Before making the decision however, you have to consider all your expenses and everything else that comes with buying a house. This includes moving to a new neighborhood and changing your family’s life. Sit down and decide if you can afford it and if it’s worth the effort.
Save for the down payment
If you think you are ready to own a home then it’s a good idea, if possible, to save enough money for a down payment. Some lenders (not all) require that you have at least twenty percent of the initial price of the home as your down payment. If you can provide the down payment you can save money because you won’t have to pay private mortgage insurance. This is an expense generally required by lenders if you have less than 20% of the home price.
Take your time
Don’t rush into home ownership or else you may find yourself in excessive debt. Take your time and shop around and save for the down payment. Evaluate the real estate market and decide the area you want to buy a house in. During this time, you can look for a good realtor who updates you on the market and gives you all the information you need to know before diving into home buying. Do all the due diligence you can beforehand.
Ensure you have good credit
To get approved for a mortgage, it’s best to have a good credit score and little debt. Debt that is generally not more than 43% of your income and a minimum credit score of 580. This demonstrates to the lender that you are responsible enough to make your mortgage payments on time.