Buying your first ever house can be one of the most satisfying feelings there can ever be! There can certainly be nothing much better than the sheer gratification you get once you know that you’ve done something you can CERTAINLY be proud of! Kudos to the ones who have successfully struck the deal of their life and bought a house that they are outright proud of. But for the ones who are planning to get their hands on the first time home buying experience, all you need is patience and the 5 ULTIMATE TIPS we have mapped down for you to begin with! These First Time Home Buying Tips are ALL that you need to end up having the home you ALWAYS dreamt off!
Play under your Budget
Buying yourself a Dream House is not just a matter of finding one that looks perfect; it doesn’t matter if you can afford it or not! Being realistic is one of the most crucial steps when it’s your first time home buying experience. Penning down the most imperative questions such as, “How much can you afford to spend THE MOST?“, “What Price Range can you play with?“ can help you map out the “Realistic” approach you must follow.
Making sure that your monthly budget allows you to cover up your fixed expenses and mortgage installments. The maintenance cost associated with buying the house is what would help you consider your options. There is no point in finding yourself a home, paying for which becomes an unaffordable task.
When planning out on your budget for your First Time Home Buying Experience, it is advisable to ask your bank’s loan officer to assist you with the finances you can rely on. Based on your financial situation, the banking officer would be able to provide you with the details as to how much the bank can lend you and what interest rate would it be.
Save for the Down Payment
When it comes to purchasing a house, one of the most preeminent First Time Home Buying Tips would be to save up for the “Down Payment.” A down payment is an initial payment that you make when buying a house. A most common approach when it comes to making the Down Payments is to put up to 20 percent down. Although many lenders would allow a much lower percentage for the Down Payment, it will be even more expensive in the long run. By putting a down payment lower than 20 percent means higher mortgage interest.
A much convenient approach is to put up a 20 percent down payment for 15 years. Here are some reasons why this method makes more sense economically.
- Setting the tenure for 15-year creates a much higher monthly installment to be paid, but it would allow you to pay off your Mortgage in half of the time. Also, it would allow you to have a lower interest rate, saving you thousands of dollars in the long run!
- When you go for a “Fixed-Rate Conventional Loan,” you keep the interest rate the same for the entire tenure.
Get your Mortgage Approved
Once you’ve worked on the aspects stated above, you must start with your quest to get a “Pre-Approval Letter” for your Mortgage. Contact the banking officers, and they will have your Mortgage worked out based on your “Financial Standings.” To have your Mortgage approved, expect to submit your W2 forms, bank statements, your tax return statements, and your paychecks to the bank so that they can verify your financial standing.
List all the “Non-Negotiables”
Once you have a “Pre-Approval Letter” for the Mortgage, you need to list all the requirements for your first house. Before you start looking for a home, list down the “Non-Negotiables”; the aspects you NEED in a house at any cost! Knowing what suits your lifestyle, your values, specific location, and what amenities your potential home must-have. This would also be helpful for your realtor, to find you something that would be WORTH the money you’re spending!
Get yourself a Real Estate Agent
Congratulations, you’ve finally made it to the final step in the home buying process. Now to get it done, get a realtor to complete your “Home Buying” quest. Don’t go for the Sellers Agent, instead hire one for yourself. The most significant disadvantage of not having your realtor and relying on the “Seller’s Agent” is that he would undoubtedly be loyal to the seller and would ensure their interest in the first place! They will try to convince you of everything from the seller standpoint. This is a very serious step and requires patience. Good luck with the purchase, and we hope this guide was helpful.