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Three Things You Need To Know Before You Make Your First Home Purchase
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A first home buyer needs to understand that buying a home involves some research and critical analysis. Buying a home is a great move for a person or family but too often people engage in the process without preparing themselves for all that is entailed in buying a home. There are three things that a first time home buyer should be aware of before they go to a realtor to find a home to buy. You should know one; your credit score, two; your mortgage down payment option and three; how much does it cost to own and maintain a home.
1) What is Your Credit Score?
A first time home buyer should know what is their credit score and before they buy a house should attempt to establish at least one year of on time payments for all their bills. The mortgage that you will be eligible for will be dependent on how timely you are in the paying of your bills.
The more dependable you prove yourself in the paying of your bills the lower interest rate you will receive on your mortgage and the less you will have to pay. Many first time home buyers do not truly appreciate how important their credit score is and they go looking for a mortgage without having established any history of on time payments. This will result in a first time buyer having to pay a very high interest rate which will impact the house that you can afford.
The second thing a new buyer should be aware of is their mortgage down payment options.
2) Mortgage Down Payment Options
Many new buyers will buy their first home with a down payment that is less than twenty percent of the house price. If you decide to take this route you will have to purchase private mortgage insurance and this will amount increase the monthly payments. Be vigilant and research your different mortgage down payment options. Try not to be influenced by the realtors or news agencies who talk about how you need to buy your house as soon as possible because of the changing interest rates. Instead, take the time to research the various mortgage down payment options that are available to first time buyers and make sure you understand them. However, the best option for any first time buyer is to attempt to save an amount of money that is over twenty percent of the house price
because you will not need to acquire private mortgage insurance.
Owning a home is a great thing but a first time home buyer must make sure that they understand how much it costs to own a home.
3) Research The Cost of Home Ownership
The cost of owning a home is not only the mortgage payments. Many first time home buyers do not take into account that they will be responsible for all utility payments, property taxes and maintenance costs. As such, it is imperative that a first time home buyer research the costs of these bills and budgets for them while also creating a crisis account for any emergency repairs that may arise. If a home owner lived in an apartment building these costs and tasks were paid by the landlord. However, the new landlord is the first time buyer and thus they are now their responsibility.
In addition, when a first time home buyer goes to close on their home they need to have an additional money available for the home inspection, movers and other costs.
The list of things that need to be accounted for may seem extensive to a first time home buyer but each of these costs can be accounted for by conducting the proper research. Owning a home is one of the greatest experiences a person or family can have and with the proper advance preparation it can be a very enjoyable experience that will provide a lifetime of great memories.
ABOUT THE AUTHOR
Douglas Lenski is a 14 year veteran of the mortgage industry and the current President of Wholesale Mortgage Services of Wisconsin. He has trained 20 loan officers and 8 mortgage loan processors. He is considered an expert in the mortgage industry by his peers. He has written many blogs on mortgage rates today , Wisconsin Mortgage rates and many more.
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