Buying a home for the first time is a rewarding and exciting experience. However, the home-buying process is challenging and can lead to unwanted anxiety and frustration if you do not arm yourself with the proper knowledge. If you can foresee and attend to critical issues before they arise, your home-buying experience will go smoothly. Additionally, when you alleviate the frustration that usually occurs during the process, you will find that you walked away with the best possible deal. Here are some tips to help you get started:
Consider the Neighborhood
Many first-time homebuyers make the mistake of finding a home that fits their size, style and price without regard to the neighborhood. You must take a closer look at the area where the home is located and decide if it fits your lifestyle. Ask yourself if it is close enough to shopping outlets or if the schools are desirable if you have children. Consider whether or not the home is close enough to your work and calculate your commute time. The secret to finding the perfect first home is more than price, size and the way it looks. Other variables such as the neighborhood’s atmosphere and the average property taxes determine whether the home is a good fit.
Mortgage Financing Options
Before you accept the first offer you receive from a lender, remember that many mortgage companies offer financing. Never underestimate the importance of shopping around for a mortgage, especially with all the resources available to you online. When you start looking, consider the current state of the housing market. Find out if mortgage interest rates are on the rise, and ask lenders how hard it is to qualify for the lowest interest rate.
The first thing you should ask lenders is what credit score you need to obtain the lowest interest rates, and what their guidelines stipulate for borrowers with average credit scores. Another consideration is mortgage loans through the Federal Housing Administration (FHA) and the Veterans Administration (VA). If you can qualify for a mortgage loan backed by the FHA or the VA, you may be eligible for lower interest rates and little to no down payment requirements.
Correctly Estimate Your Monthly Costs
Many first-time home buyers fail to consider the other expenses associated with a mortgage besides the monthly payment. You must consider the cost of homeowners insurance, property taxes and any maintenance costs. If you were a renter before you bought your home, the owner typically handled maintenance issues. As a first-time homebuyer, you are now responsible for all maintenance costs associated with your home.