Buying a home for the first time can be an incredibly exciting but also stressful time for those hoping to enter the housing market. A house may be the largest purchase made in a person's lifetime, so it's important that the process go smoothly to prevent unnecessary worry or financial strain.
Here a few things shoppers should know when looking for their first home.
It's important to determine what kind of living space works best for you and your family. Do you need a home with bountiful yard space and a two-car garage? Or would a condo in multi-unit building suit your needs? What does the ideal residential neighborhood look like to you? Are there certain home amenities you could not live without? These are all considerations you must take into account before beginning any other phase of the home buying process.
Your credit score can affect the kinds of mortgage loans you can be approved for and what your interest rates and loan terms will be once you are approved. USA Today noted that you should check for and subsequently dispute any errors found in your credit report. You should also try to pay off any outstanding debts which could be lowering your score even further.
Lenders often run an inquiry into your credit history when opening a new credit account of any kind, which could adversely affect your score temporarily. To prevent this happening during mortgage applications, do not open any new credit accounts.
Determine the total cost of any prospective homes you look at – considering the property taxes, closing costs, insurance, maintenance costs and other factors. This can help guide you in assessing your budget for a potential down payment and your monthly house payment, according to Investopedia.
Weighing your mortgage options is another huge step in the home buying processes. Would a fixed conventional mortgage work best based on your income? Could an adjustable rate mortgage benefit you the most early on?
Down payments also do not have to be at the traditional 20%. Some lenders allow for less but this could result in higher overall costs and paying for private mortgage insurance, according to USA Today.
There may also be tax credits and lending programs for first-time homebuyers, veterans and residents of certain municipalities you can use to your advantage to help lower interest rates and down payment amounts.
Once your loans are approved and you find your dream home, a thorough inspection of the residence still needs to be conducted to ensure it's safe and up to your standards. Hire a professional to inspect the property. If any abnormalities are discovered that were not previously discussed, you generally have the option to rescind your offer or have your deposit refunded.
Academy Mortgage is one of the top independent purchase lenders in the country as ranked in the 2016 CoreLogic Marketrac Report. Visit www.academymortgage.com to find a loan, get a rate, or calculate your payment today.