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4 Crucial Tips for First-Time Home Buyers

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While buying a home is a major milestone, it comes with numerous challenges, particularly for first-time buyers. Securing the necessary funding, managing the closing process, and picking the right location are some of the complexities you’ll likely experience when purchasing your first home. However, the right guide and tricks can make your home-buying journey more exciting and memorable. Discussed below are four crucial tips for first-time home buyers. When looking for your first home, it’s important to consider the size and layout of the property, as well as the neighborhood amenities and proximity to your work or school. Additionally, considering the potential for future growth and resale value is important for a first-time buyer. These important features to consider can help you make a well-informed decision and find the perfect home for you.

1. Set a Budget

One of the initial steps when purchasing a house is ensuring you have the finances to support your home ownership dream. You have one-time expenses to factor in, including closing costs and downpayment, and ongoing expenses, like routine home maintenance and property taxes, to prepare for. Creating a budget helps narrow your search for a suitable home. The following steps can help you make a realistic budget when buying your first home:

  • Research home values to get insights into your local market. Click here to get an idea of how much homes cost
  • Determine how much you can comfortably spend on a home
  • Decide how much to save for your down payment: If you save less than 20% down payment and have a conventional loan, your loan provider may require you to a PMI (private mortgage insurance)
  • Set aside money for paying closing costs, which include credit report fees, appraisal fees, and more
  • Account for ongoing expenses such as homeowner’s insurance, mortgage principal, and more, plus any other new expenses

2. Check and Improve Your Credit Score

Your credit score impacts home-buying, including getting a mortgage and negotiating interest rates. It affects the loan option or amount you can qualify for and influences the interest rates for your mortgage loan. Lenders also use your credit score to determine your creditworthiness. A high credit score is invaluable when buying a home because it shows lenders that you’re a low-risk borrower, increasing the likelihood of better loan terms and interest rates.

3.    Apply for Mortgage

Once you determine the amount of money you need to buy a home, apply for home financing. Although you can apply to a lender directly, using a qualified mortgage broker is the best solution for finding the most appropriate mortgage deal. They’ll search the mortgage market for a loan suitable for your needs.

A mortgage broker can also help you save money by choosing a loan with the lowest fees, interest rates, and other criteria to ensure the most affordable home loan. Also, a broker will direct you through the mortgage application process to better your chances of getting approved the first time.

4. Hire a Real Estate Agent

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With deadlines to meet and decisions to make, the home purchase process can be challenging. Also, buying a house on your own takes a lot of work, research, and time.  A real estate agent helps simplify the home-buying process, especially for first-time home buyers. The best agent can guide you through the otherwise complex process and respond to any questions you might have. Real estate agents have excellent negotiating skills, which eliminates the possibility of unknowingly overpaying for a property due to your lack of understanding of the local market’s fair values. They can also help you:

  • Find a home that matches your needs and budget due to their knowledge of the local real estate market
  • Navigate home inspection
  • Deal with all the paperwork and understand the legal jargon involved in purchasing a home  

Final Thoughts

While owning your first home is a dream come true, the process can be complex. However, setting a budget, picking the right property, improving your credit score, and applying for a mortgage can help ensure a seamless, memorable experience for every first-time home buyer.