Buying your first home is an exciting time in your life. It’s the first time you will own valuable property. Of course, if you’ve never bought a home before, you may not know the best way to go about it. Here are some tips for first time home buyers.
1. Improve Credit
Credit is extremely important when it comes to buying a home. If you don’t have great credit, the bank may not want to give you a loan. Or they may offer you a loan with a ridiculously high interest rate. Instead, take care of your credit score well in advance.
Pay off your credit card payments and other payments on time. You should also do your best to avoid anything going into collections. If you do have items in collections, you need to pay them off. Credit rolls off every seven years, so you still have hope, even if your current credit score needs some serious improvement.
2. Save for Down Payment
Your credit isn’t the only factor that will play a role in your interest rate. A bank will also give you a better interest rate if you have a significant amount of the cost of the home ready as a down payment. The more you have, the better. You won’t have to pay interest on that amount. Plus, you should be able to negotiate a better rate with a higher down payment. Of course, you need to also have additional savings. A house generally comes with a whole lot of other expenses.
3. Consider Additional Costs
When you buy a house, you need to spend a lot more than just what the house costs. You need to spend money on the realtor, closing costs, moving, new furniture, and a number of additional expenses. You may also need to spend money on repairs down the road, so you need to keep money ready for when the unexpected takes place. These costs you didn’t anticipate will pop up, and you need to be ready for them. The name of the game is to fix your credit then save.
4. Shop Around
Some people make the mistake of buying a new home too hastily. Do your research to see what homes are out there. You can do this by going to a number of different open houses in your area. You may also choose to look at houses online first.
You don’t want to just shop around when it comes to the house. You need to shop around when it comes to your realtor as well. Talk to a number of different realtors to determine who you want to do business with.
5. Get Inspection
You never want to just out-right believe everything someone says about their house. You need to take the time to have an inspector come in and provide a professional report. You may be able to use this report to negotiate a better price on the home for you, especially if it indicates problems that the owner didn’t tell you about before. Just be aware of any repairs you may have coming up in the future.
Some people don’t necessarily like the negotiating aspect of buying a house. They may even prefer to take the suggested price and move forward. However, it’s the homebuyer’s right to counter with a lower offer and try to get a better deal. It may take up a little time in negotiation, but it will end up saving you a good deal of money. Just be careful not to provide an offer that may be insulting to the seller.
7. Buy Insurance
As a homeowner, you are responsible for everything that happens to the home. You need insurance to cover yourself in the case of large expenses, such as flooding or a fire. Talk to your current rental or auto insurance company to learn what they can offer you in your new home. When you bundle your different insurance policies together, you may be able to save money.
A home is a place for you to place down roots. It’s also a place for you to raise your family. When you’re ready to buy a home, you need to take it seriously. You want to turn this purchase into an investment for you. Start smart, and you’ll be in a better position when you decide to move on.
Cape Coral Mortgage has been helping first-time buyers – and every other kind of buyer – get financing for Cape Coral homes for over 20 years. Rest assured we have the experience and knowhow to walk you through the process and answering any questions you might have about confidently financing your first home.