First-Time Buyers /What Financial Advice Would You Give to Your Twenty-Year-Old Self?
When preparing to buy a home, there are many things to keep in mind. Here is some advice to know as a first-time buyer.
Start saving as early as possible
There are many costs associated with purchasing a home such as:
- Down payment
- Closing costs
- Move-in expenses
It is important to start saving as early as you possibly can to cover the costs of buying your first home. For first-time buyers with great credit, there are many special loan offers that can lessen the total of the down payment.
Determine your budget
Before you even start to consider houses, you need to determine what you can afford to avoid being upside down on your mortgage. You need to factor in things such as your income, your down payment, any pre-existing debt, and your credit score. It is extremely important to understand what your credit score can do for you.
Explore your mortgage options
There are a wide variety of mortgage options available to buyers. Each has different down payment rates and eligibility requirements. It is important to research all of your options. Mortgage loans offer different lengths of terms, so it is important to consider where you see yourself being during the length of the loan.
Types of mortgages:
- Conventional mortgages (not assured by the government)
- FHA loans (insured by the Federal Housing Administration)
- USDA loans (guaranteed by the U.S. Department of Agriculture)
- VA loans (guaranteed by the Department of Veterans Affairs)
Show that you are a serious buyer
Getting things such as a mortgage preapproval letter can help to show sellers and real estate agents that you are in fact a serious buyer. This allows you to stand out from the potential buyers who have not done this step yet. It is a good idea to apply for preapproval loans when you are ready to start shopping for your home.
Do your research when looking for a realtor
Your realtor plays a huge part in the home buying process, it is important to find the right one for you. A quality realtor will try their best to find the right home and neighborhood for you and your family. They will also guide you throughout the whole process. It is a good idea to speak to a few realtors before deciding who you will choose.
Stick to your budget
No matter what you do throughout this process, stick to your budget. This will help you avoid financial stress later on and you can always remodel a home if there is something about it that you don’t love. Going out of your budget can cause many issues, so make sure if nothing else, you stick to what you can afford.