Tips for First-Time Home Buyers
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Buying a home for the first time is an exciting yet overwhelming process. As most people know, purchasing a home has its ups and downs, and it's never as easy as just finding the perfect home and signing a few contracts. Fortunately, with a bit of preparation and a few tricks up your sleeves, you can make buying your first home a breezy, stress-free experience.
Check out some of our best tips for first-time home buyers:
- Prepare Your Mortgage Application. First things first, get materials ready to prepare your mortgage application. This includes assessing your current debt (such as credit card bills or student loans) and checking your credit score. The better standing you're in, the more likely you are to be approved for a sizable mortgage and loan. Then, you can start planning how to improve your score or pay off some of your debts to make it easier financially when it comes time for monthly payments.
- Determine Your Budget. After preparing your mortgage application and being approved for a loan, it's time to decide your overall budget. Remember, you'll need to consider costs beyond just your mortgage payment, including homeowner's insurance, homeowner's association (HOA) costs, property taxes, maintenance repairs, and utility bills. You'll also want some money reserved for emergency costs that could come up after you close. Consider all of this and see what you can reasonably afford and what an appropriate budget is for you.
- Decide Your Down Payment. While determining your budget and going over your expenses, now is a great time to decide on your down payment. The amount you initially put down depends on the type of mortgage you receive; however, most down payments range from 3.5%-20% of the overall cost of the home. The larger the down payment, the less of a risk you appear to lenders. Putting down less than 20% may trigger private mortgage insurance, protecting the lender should you default on your loan. Avoid this if you can and meet with a mortgage officer to discuss a reasonable down payment for you and your finances.
- Determine The Type of Home You Want. Once you've gone over your finances, it's time to start looking into homes! Your budget will give you a good idea of the type of home you can afford, its amenities, and the square footage you can own. Though many people love single-family homes, you should look into condos, townhomes, and duplexes. Just remember: some condos and townhomes may require you to pay a monthly HOA fee– though the initial cost of the home could be less than a single-family home, it's only worth it if you can also afford the HOA fees!
- Have A Wishlist. Start putting together a list of things you want and need in your potential home. This may include neighborhood, commute to work, school districts, walkability, etc. Determine your dealbreakers and what you can live without to help prioritize some homes over others. You'll likely be looking at a few different houses, and having this list sorted out will help you choose the best home.
- Get An Abstract. Though you hopefully have a professional to help you with the home-buying process, one thing you should focus on is obtaining the abstract, or the history of ownership, of the property you're buying. This will ensure that there is nothing against the house and that the seller you're buying from can transfer the property rights to you without any issues.
Guarantee Abstract Co. has provided our customers with commendable service and unparalleled support for all their real estate title and closing needs for over 90 years. We work with all parties to bring the transaction to the closing table, including sellers, buyers, lenders, and real estate agents. With our extensive experience and expertise, you can trust us to provide the right solutions the first time. Visit our website to learn more, or call us at 580-237-2244 to get started today.
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