7 Ways to Prepare for Buying Your First Home
Nothing provides financial security quite like owning a home. The problem is, the home-buying process can be an overwhelming one for first-time buyers, especially for people who aren’t in an ideal financial situation. If you’re preparing to buy your first home, here are 7 tips that can help you make the process as easy as possible.
1. Start Saving Early
There are a lot of costs that come with buying a home, so start saving money as early as possible. Cut out that weekly fast food trip or your daily coffee runs and try to put a little bit of money in savings each week. Even if you’re not saving a lot of money, every little bit helps when you’re buying your first home. You can use budgeting apps to help you create a budget and save more money.
2. Know What You Can Afford
You don’t want to buy a home you can’t afford, so figure out your budget before you apply for a loan and start looking at homes. The general rule is that you shouldn’t spend more than 28 percent of your gross household income on housing expenses, which includes your mortgage, home insurance, and annual property taxes. You also have to make a down payment and buy furniture for your new home, so keep that in mind.
3. Understand Mortgages
Mortgages aren’t rocket science, but they are a bit different from regular loans. If you’re not familiar with how mortgages work, pick up a book about home loans and find out more before you commit to a mortgage. You should understand the terms of your mortgage, what’s required of you and how much you can expect to pay in interest.
4. Research Your Options
Rather than jumping at the first available loan, take some time to research your options. For example, Arizona VA loans from Griffin Funding are a great way for first-time homebuyers to get a low-interest loan without having to make a hefty down payment. Of course, only active duty service members and veterans are eligible for these loans, but there are other options that may serve you better than a traditional mortgage as well.
5. Know First-Time Buyer Benefits
There are differences in the home-buying process when you’re buying your first home. Take some time to read about first-time homebuyer benefits in your state and how you can qualify for them. Some homeowners can get a loan with no down payment, while others may qualify for a lower interest rate or a tax break. A little research about these benefits can save you a lot of money.
6. Get Pre-Approved
Once you’re pre approved for a loan, the home-buying process becomes a lot easier. If you have the money for a down payment and you’re ready to buy a home, get preapproved for a loan by a financial institution. Once you’re pre approved, you can find a real estate agent and start shopping around for homes until you find something you want to make an offer on, so this is when the exciting stuff starts.
7. Find a Good Real Estate Agent
Finding a great home at a reasonable price is only possible with the help of a good real estate agent, so take your time selecting one. Your real estate agent will help you find homes that fit your needs, spot potential problems with those homes, and negotiate a price. A good real estate agent can help you save money when buying a home so you’ve got a larger decorating budget.
Make sure to research agents in your area and read up on reviews. A quick search for a term like “real estate agents in Tennessee” should yield results for top real estate agents near you.
You’ve got a lot on your plate as a first-time homebuyer, but taking the time to work through these steps can help a lot. To start, read up on mortgages and figure out how much house you can afford. Once you’re pre approved and ready to buy, clearly communicate with your real estate agent to find your dream home in your price range. It might seem like a lot to do, but it will fly by.
