1. Save for a Down Payment
It is necessary to save up for a down payment before you begin the process of buying your first home. Down payments can be as little as 3% for first-time home buyers. With a down payment of less than 20%, your loan may cost more and you will have to carry private mortgage insurance. It’s a good idea to keep your home budget in mind when you are saving for a down payment.
2. Figure Out What You Can Afford
Use mortgage calculators to determine the monthly cost of your new home. Don’t forget to add in the cost of utilities, insurance, and any upgrades your home might need before you move in. It is a common mistake for first-time home buyers to underestimate the costs of owning a home. If you need to save money first, don’t be impatient. You will also need to know how much it will cost to physically move from your apartment to your new home.
3. Be Careful with your Credit
Your credit score will determine whether you are approved for a home and what kind of loan you will get. Always check your credit scores a few times a year and make note of any errors. You can dispute these errors with the credit card companies. Making credit mistakes is costly. This has kept many people from their dream of homeownership.
4. Look Into State and Federal Programs
The Federal Housing Administration offers first-time home buyer loans with down payments as low as 3.5%. States also offer many different programs for first-time home buyers. Be sure that you check with your state, county, and city to make sure you are not missing out on any special deals.
With your finances in shape, it’s time to start looking for a house. Mark Alvarado shares some of his top tips with fellow freelance graphic designers.
5. House Hunting Tips
- Decide which kind of house you want and which neighborhoods you are interested in.
- Make a wish list of what you want in a home, but remember that no one house will fill all of your requirements.
- Be prepared to move quickly and make an offer if you want the house.
- Be sure that you have a home inspection. This will point out any problems with the home. Having a trustworthy home inspector is a must when you are buying a house.
6. Do Your Research
Become an expert on the real estate market in the neighborhood where you want to buy a home. Make sure that you know what the other homes in the area have sold for and when. This will help you avoid getting a bad deal.
7. Don’t Romanticize a House
Emotion can play a big part in home buying, but it pays to be cautious. Don’t let your feelings get in the way of taking a realistic look at your prospective new home. Look seriously at any benefits and disadvantages presented by the house. Remember to have your home inspected, in case the seller has made cosmetic improvements but left serious structural problems.