Being a first-time home buyer is exciting, but it can also be super scary. Houses cost a whole lot of money, and you’ll have to sign a lot of different papers to legally make the purchase.
It’s an intimidating process, but going into it armed with knowledge will help you feel more confident in your deal. Take a few moments now for research, and check out some financial tips for buying your first home.
Get your credit report in shape
You can’t get the house you really want without a good credit rating. The good news is that building your credit score probably isn’t quite as difficult as you may think.
If you don’t already have an excellent credit report, start working towards refining your history as soon as possible. Get your credit score into the 700-800 range, and you’ll find that financing options will open up to you.
The higher your credit, the easier it will be to get the home you want. Even if you’re just looking to purchase an apartment for 50k or less, you’ll need to have the ability to prove that you’re good for the money before you can get a loan to cover the cost.
Build a substantial savings
You’ll need quite a bit of money of your own to purchase a home. Sure, a loan will cover the bulk of the cost of the house, but that’s not the only cost you’ll need to consider.
Initially, you’ll need a sizable down payment to even secure the loan. It’s wise to save at least 10 percent of the price of the loan for a down payment.
If you’re wanting to buy a $100,000 house, you should have at least $10,000-$15,000 saved up for a down payment. Remember, the more you have saved to pay up front, the better your loan terms will look when it’s all said and done.
Consider the first-time buyer perks
Check at the state, city, and county levels for first-time home buyer programs. If you can find a good first-time home buyer program, you’ll likely find a lower interest rate on your mortgage loan. Sometimes you can even find down payment and closing cost assistance as well. Also, don’t forget to cash in on the various tax benefits offered to first-time home buyers.
Get pre-approved for a home loan
Before you ever set your eyes on a home and start getting yourself excited about living there, you need to arrange the financial aspects. You’ll need a legit pre-approval letter to really move forward with a purchase. Once you have a loan pre-approval letter, you know your budget, and you can make a more concerted effort towards finding the home of your liking.