First time home buyers – here’s what you need to know
Thinking about buying your first home? Buying a home can be one of the toughest, most stressful things you can endure if you’re not prepared. So, we took the time to sit down and gather some tips to help make your home buying experience quick, efficient and easy.
Buying your first home: Where to begin?
It’s key to put a game-plan together. Figure out where you want to live and if it’s conveniently surrounded by the grocery stores, shopping malls and restaurants that you desire. Once you have your location pinned down, check out different neighborhoods and stand-alone properties that make you feel right at home.
With any major purchase (like buying a house), knowing your credit score ahead of time can help prepare you for what kind of mortgage you’ll qualify for and what you’ll need fix (if anything) to move forward. There are websites that make managing your credit easy like Credit Karma and Credit Sesame. Their websites make it easy to check in on your credit score anytime at no cost to you.
Buying your first home: What can I afford?
Figuring out how much you can afford in a home is a whole other beast to conquer when buying a home. However, when using Nerdwallet’s mortgage calculator, you can see what your potential costs would be month to month as well as your down payment and closing costs. This tool is a great way to get started on an initial budget and goal for your savings. Keep in mind, there may be additional costs when buying a home. For example, if you find yourself having to replace appliances or do a little remodeling, the budget may need to be better padded before purchasing. There is also the fun possibility of an HOA fee. According to Bankrate.com, “HOA fees typically range from $200 to $400 per month, but they can vary greatly by region and based on the amenities available to members.”
Buying your first home: The devil is in the details
Time to start closing in on additional details. If you used the mortgage calculator, you saw what a potential down payment could look like so you’re better prepared when the time comes. A down payment can be anywhere from 3% and up on a home. Knowing what you can afford will help you set a goal of what to set aside beforehand.
Get an agent to help keep confusion down to a minimum. Just keep in mind that while real estate agents can be incredibly helpful, unless you hire what is known as a buyer’s agent, the agent’s first loyalty is to the seller. In an article at The Lenders Network, Deborah Dennis says “The seller has negotiated the commission they pay long before you see the house advertised.” In other words, the agent is hired by the seller and is incentivized to get the best price in the shortest period of time.
Now, it’s time to get approved. Research your mortgage options and start comparing rates. “Many home buyers get a rate quote from only one lender, but this often leaves money on the table. Comparing mortgage rates from at least three lenders can save you more than $3,500 over the first five years of your loan.”
Zillow can also help you find a lender near you for local mortgage programs and My Mortgage Insider has a list of the best first-time home buyer programs. Getting quotes from three or more of these can help you save money. It is important that in doing this you don’t make any negative changes to your credit report. You can help prevent this by not applying for new credit cards, racking up debt and keeping a close eye on your finances from day to day.
Ready to open the door to your new home? Getting your financial situation together is important, your savings account is important too. If you don’t want to empty your emergency cash stash, a LendingPoint loan may be a great option.
Even if your credit score is lower than you would like it to be, you do have personal loan options. A personal loan can even help improve your credit score. By taking out one of our personal loans. You can make affordable monthly payments and build your credit story by making on-time payments each month. As you continue to make your payments on time, you build your credibility and your credit history. Apply today
LendingPoint is a personal loan provider specializing in NearPrime consumers. Typically, NearPrime consumers are people with credit scores in the 600s. If this is you, we’d love to talk to you about how we might be able to help you meet your financial goals. We offer loans from $2,000 to $25,000, all with fixed payments and simple interest.