Buying your first home can be a very exciting process. While you may be concerned with finding the property that best suits your needs in your desired location, it's important to remember that purchasing a home is a major financial commitment. And in most cases, you will be taking out a mortgage to pay for your new home. If it's your first time buying a home, the process of getting a mortgage can feel overwhelming. However, it doesn't have to be. Here are three tips for first time home buyers.
Check Your Credit
Before you even look at a home that's for sale, it's a good idea to know where you stand in terms of your credit. Checking your credit report will give you a good idea of what type of loan you will be able to get and at what interest rate. Credit scores over 750 are considered excellent and are most likely to get you the best interest rates possible. If you have a lower credit score, you should consider taking steps to increase your score, such as paying down credit card debt, in order to qualify for a better interest rate. If there are any errors in your credit report, having them removed can also increase your credit score.
Another thing that you should be doing when you buy your first home is shopping around for your mortgage. Just a half of a percentage point in your mortgage interest rate can make a big difference in how much you pay in the long run. Shopping around for the best rate can save you thousands of dollars. It's also important to look into all of your options. While a conventional mortgage might be the best option in some situations, there are other types of loans that may also work for you including VA loans and FHA loans.
Make Sure You Can Afford A Home
Another thing that you should do before purchasing your first home is make sure that you can afford it. Most experts recommend spending no more than 25 percent of your take home income on your mortgage payment. It's important to take a close look at your monthly budget before making the plunge and buying your first home. You will also have to factor in other expenses, such as maintenance and homeowner's insurance, that come along with being a homeowner.
Purchasing a home is a major decision. Before starting the process, it's important to check your credit since it plays a pivotal role in your mortgage interest rates. Shopping around and looking into different lenders will also ensure that you get the best mortgage possible. You should also look carefully at your budget and make sure that you can comfortably afford your new home.Share