Buying your first home can be stressful. Not knowing whether it's "the right" time to buy, or if you should jump into ownership even if you can't afford your forever home are just some of the issues first-time buyers face. Use these pieces of practical advice if you're looking to purchase a home for the first time:
- Start saving early; start saving for down payments, closing costs, and move-in expenses. The down payment will depend on the type of mortgage you choose and the lender. Use a down payment calculator to decide on a goal, then set up automatic transfers from checking to savings to get started.
- The closing costs are what you pay to finalize your mortgage and they range from 2%-6% of the loan amount.
- Lastly, you'll need cash set aside for immediate home repairs, upgrades, and furnishings.
- Decide how much home you can afford; figure out how much you can safely spend on a home before starting to shop.
- Check and strengthen your credit score; your credit score will determine whether you qualify for a mortgage and affect the interest rate lenders will offer.
- Get a pre approval letter; having a pre approval letter shows home sellers and real estate agents that you're a serious buyer, and can give you an edge over home buyers who haven't taken this step yet.
- Pick the right type of home given your lifestyle and budget. Another option to consider is buying a "fixer upper", these houses usually sell for less per square foot compared to move-in ready homes. However you might need to budget extra for repairs and remodeling.
- Stick to your budget; lenders may offer to loan you more than what is comfortably affordable, or you may feel pressure to spend outside your comfort zone to beat another buyer's offer.
- To avoid financial stress down the road create a price range based on your budget and stick to it.
- Pay for home inspections. Professional inpectors look for potential problems with the home so you can make an informed decision about buying.
- Start saving early; start saving for down payments, closing costs, and move-in expenses. The down payment will depend on the type of mortgage you choose and the lender. Use a down payment calculator to decide on a goal, then set up automatic transfers from checking to savings to get started.
- The closing costs are what you pay to finalize your mortgage and they range from 2%-6% of the loan amount.
- Lastly, you'll need cash set aside for immediate home repairs, upgrades, and furnishings.
- Decide how much home you can afford; figure out how much you can safely spend on a home before starting to shop.
- Check and strengthen your credit score; your credit score will determine whether you qualify for a mortgage and affect the interest rate lenders will offer.
- Get a pre approval letter; having a pre approval letter shows home sellers and real estate agents that you're a serious buyer, and can give you an edge over home buyers who haven't taken this step yet.
- Pick the right type of home given your lifestyle and budget. Another option to consider is buying a "fixer upper", these houses usually sell for less per square foot compared to move-in ready homes. However you might need to budget extra for repairs and remodeling.
- Stick to your budget; lenders may offer to loan you more than what is comfortably affordable, or you may feel pressure to spend outside your comfort zone to beat another buyer's offer.
- To avoid financial stress down the road create a price range based on your budget and stick to it.
- Pay for home inspections. Professional inpectors look for potential problems with the home so you can make an informed decision about buying.
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