Buying a home can be both exciting but at the same time confusing as you try to navigate through all the various aspects of purchasing a property. If you are a first-time home buyer, it is suggested to take time and carry out your own research before making the biggest financial decision of your life. Here is a list of tips, as provided by Rex Real Estate, that a new buyer can follow to smoothen the purchase process.
Aim for 20% down payment
Brokers and lenders are always looking at the down payment that you can afford when reviewing your home loan application. It is recommended to have a solid 20% down payment amount in your bank to ensure that your application looks favorable. It will not only help you save a huge interest over the loan period but you can also avoid private mortgage insurance.
Evaluate your needs
We all want the best furnishing and décor, but you should weigh the pros and cons before you send your offer. If you make a wrong decision when purchasing a house, you could potentially regret it later on. It is best to list down your must-have needs before you go house hunting to avoid being swayed when you make your decision.
Understand your credit score
Credit score impacts the mortgage approval and interest rate. It is crucial to have a good credit standing and correct any errors or address issues in your credit score early on before you begin looking for houses.
Call the bank or your broker and get pre-approved for a loan. This way you have a clear picture of how much you can afford and you are not wasting time looking at houses out of your budget.
Get a home inspection
Most first-time buyers skip the home inspection process as they want to save money, but later on find out that the home has major problems that will cost a lot of money to fix. Hence, it is best to pay for a home inspection for each offer you make as it can save you from grief in the future.
Buy within your means
Even if you are tempted to take a bigger mortgage, it is best to not stretch yourself as you never know what can happen. Always stick to your budget and do not buy anything if you are uncomfortable with the costs.
This is only your first home purchase. A dream home may take years and many purchases to achieve. Be prepared to accommodate any changes to your wish list.
Know any hidden costs
Most new buyers are unaware of lots of hidden costs associated with buying a new house. It is recommended to have cash in reserve for furniture, moving charges, unexpected repairs, and so on before making your final purchase.
Work with a qualified professional
Hiring a qualified mortgage professional can save you from all the confusion and anxiety surrounding the purchase of your first home. A knowledgeable and experienced professional will help you understand all the necessary information required for this endeavor so that you make a well-informed purchase decision.