07 Jun Advice For First Time Homebuyers
Your first day of school, your first kiss, your first child, buying your first home — all monumental and memorable moments that uniquely combined excitement and joy with anxiety and stress.
When purchasing your first home, many variables guide your decision. What type of neighborhood do you want to live in? What kind of house do you want? What size house can you afford? What type of loan is the right fit? With all these lingering questions, how can you make sure you are making the best decisions?
Read below for several helpful tips for first time home buyers:
- Determine what you want in a home. Make a list of requirements that your future house and neighborhood must meet. Remember to consider your future needs –– kids, pets, schools and your commute. Keep in mind that no house is perfect and your first home may not be your dream home.
- Start saving for a down payment. It is common to put 20% down, but some first time home buyer programs allow as little as 3% down. Ways to save for a down payment include setting aside tax refunds and work bonuses and setting up automatic savings plans.
- Research federal and state programs.. Special government programs often offer assistance to first time homebuyers which include tax credits, low down payments and interest free loans. Some counties also have programs with benefits for those purchasing their first home.
- Identify your loan and down payment options. FHA loans, USDA loans and Veterans Affairs loans all offer low down payments. For help determining what you can afford and what type of loan is right for you, consider using a mortgage calculator or contacting a professional mortgage lender.
- Get a preapproval letter. This shows that a mortgage lender thoroughly examined your finances and confirms how much they are willing to lend you and in what terms. Having a preapproval letter on hand gives you an upper hand over other buyers who haven’t completed this step.
- Make a strong offer and prepare to negotiate. Consider how much over the asking price you are willing to pay for your first home. When negotiating, don’t let your emotions take over, stick to your budget to avoid a mortgage payment you cannot afford.