Are you thinking about buying your first home, but don’t know where to start? This process can be overwhelming for someone who has never experienced it. Whether you plan to buy a home in the next couple of months, or if it’s in your 5-year plan, there are steps you can take now to prepare yourself and your family for purchasing a house.
However, if you’ve already started the process as a first-time home-buyer, we hope these tips will encourage you to hit your goal and have a smooth transaction.
1. Save Money
You should already be setting money aside for your down payment and other expenses which arise that you didn’t know about or plan for at the beginning. Don’t forget about closing costs, HOA fees, purchasing a survey, etc. Every real estate transaction is different, but it’s best to be cautious and save as much money as possible to cover your expenses.
2. Work on your Credit Score
Whether you plan to buy soon or in 5 years, start building up your credit score now. Pay your bills on time, especially your big purchases like car payments, and then focus on your credit cards. Keep your credit cards at 10 percent or lower. It’s important to have a good credit score so that you may be approved to buy your home!
3. Keep a Steady and Reliable Job
Two-year employment is ideal, but at least a 2-year history of your job is required. If you have over a 6-month gap in employment, it can start to get tricky to get you approved through a lender.
4. The Truth Behind Your Down Payment
You don’t actually need 20% down to buy a house. There are several grant and down payment assistance programs that can help with up to 7% of your closing costs and down payment. Those programs aside, the FHA minimum down payment is still only 3.5%. Every lender or bank is different, so be sure to talk to your loan originator about your options.
5. Don’t Feel Obligated to Buy at Your Highest Approved Amount.
Even if you are approved for a higher-priced house, that may not always be the smartest choice depending on your needs and the needs of your family. Look at your budget and see how much house you can afford to live in and still be comfortable with your finances. You never want to be ‘house-poor’.
Voila! These are our top 5 tips for first-time home-buyers. If this is you, we are very excited to help you and would love to give you more information. Please reach out to us today if you have any questions and happy buying.
Questions? Comments? Reach out to your First Western Title rep today!