Like any big project, a successful home buying experience is all about getting the details right at every stage, from start to finish. Here are a few tips for first-time homebuyers to help navigate the process, save money as well, as close the deal.
Start Saving Early
Here are the few main things to consider when saving for a home:
Down payment: This will depend on the type of mortgage you choose and the lender you go for, but even a small down payment can be challenging to save.
Closing costs: These are the fees and expenses paid to finalize your mortgage, and they typically range from 2% to 5% of the total loan amount.
Move-in expenses: You’ll need some cash after you purchase your phone. Set some money aside for immediate home repairs, upgrades as well as furnishings.
How Much You Can Afford
Figure out how much you can spend safely on a house before starting to look. Decide on the price range based on your income, your debt, down payment, credit score, and even where you plan to live.
Compare Rates and Fees
The CFPB recommends that you start by requesting loan estimates for the same type of mortgage from a number of lenders to compare the costs, including interest rates and possible origination fees.
Your Budget
Sometimes, a lender may approve you for a larger loan amount or you may be tempted to apply for more than what you can comfortably repay in order to beat another homebuyer’s offer on a property you are considering purchasing. Don’t do that.
Look at properties below your price limit so that you have some wiggle room for bidding in a competitive market.
Negotiate
You may be able to save some money by asking the seller to pay for repairs before the buy or lower the price to cover the cost of repairs that you’ll have to make later. Your negotiating power will, of course, depend on the local market.
Get Enough Insurance
Your lender will need you to buy homeowners insurance before you close the deal. This then covers the cost to repair or replace your home and belongings if anything is damaged by an incident that is covered in the policy.
