First time home buyers are faced with a daunting task these days because the home mortgage and financing markets have created so many avenues for buyers to finance a home. A lack of experience about the going ons of the real estate and mortgage industries and how financing is constantly changing may intimidate and bewilder many potential home buyers. The good news is that any Mortgage Loan Originator worth their weight will be well-versed in current financing solutions and be able to identify and filter the many options down into the ideal home loan program for each individual buyer.
What to look for when making your plans to buy your first home:
Several key factors have to be put into consideration in order for everything to be successfully executed with your first home buying transaction. Turning your home ownership dream into a reality can be made easier by knowing just a little bit of useful information about home mortgages and the real estate market.
Buying a home means changing the ownership of a particular residential property from the seller to the buyer. A significant down payment can be hard to come up with for the new home buyer, which is why there are several down payment assistance programs for first time home buyers. While the down payment is important, having assistance programs makes it less stressful and other factors for how much home you can afford come into play. The type of house that you can afford may be influenced by your income, credit rating or score, recurrent monthly expenses, initial down payment needed for the property and finally the interest rate for the mortgage plan involved.
You can visit many real estate exhibitions and open house meetings to have a familiarity of all the housing options that you have in a certain area. However, we strongly advise that you talk to both a mortgage professional and a real estate professional before making any decisions. You can spend as much time as you like researching but there are all sorts of nuances and state programs that change frequently so you may not have the most up to date information. A first time home buyer should never plunge into closing any property especially when the deal sounds too good.
Apart from the personal home financing factors that have been mentioned above, a first time home buyer needs to have the ability and knowledge to get the best deal possible.
Credit Scores and Ratings
If you have decided to buy a home, you should ensure that your current credit scores are as high as possible in order to get best interest rates from mortgage lenders. Your credit score is usually a direct reflection of your ability to pay back loans, whether you pay your bills on time and your overall financial position as well. What can you do to raise your credit score just before buying a home? Well, you can go through all your credit reports and take all the necessary action to rectify any form of credit that you may have abused in the past.
Improving your credit score has to be your own self driven initiative to ensure that you do not spend your whole life paying for your home. It is not as overwhelming as it sounds and we have compiled a whole list of tips to help you improve your credit score.
Knowing which type of real estate property your potential house falls into is also very important. There are quite a number of residential housing options nowadays such as single family houses, duplexes and multifamily houses as well.
A first time buyer should also be aware of some additional costs that may be independent of the price of a home. Your Loan Officer and Realtor should make you aware of these potential expenses so there are no surprises, and you don’t end up struggling financially each month.
Examples of these kinds of expenses to consider:
– Legal fees
– Survey fees
– Renovation costs
– Utility payments
– Home inspection fees
– Home insurance fees
– Real estate property taxes
– Moving costs and many more
Last but not least, a first time home buyer should always carry out a home inspection before moving to close on any home or property. There are quite a number of professional inspectors who do this kind of work, which is well worth the time and investment and your lender or real estate agent will be able to recommend a few different home inspectors to choose from. The home inspectors will inspect your potential new home and find both minor and potentially major issues with the home. Some of things a home inspector might find are faulty electrical wiring, a bad heating unit or hot water heater etc. Always consult a professional so you don’t end up with a huge, unexpected problem in your new home.