First Time Home-buyer Tips 101
home buying
Tips for the First-Time Home-buyer
Educate Yourself
Become familiar with the home buying process. You can do this fairly inexpensively by picking up easily understandable books such as Home Buying For Dummies. Also look for local free first-time home-buyer seminars in your area.
Save for the Down Payment and Closing Costs
Keep in mind that while minimum down payments start around 3% to 5%, the greater your down payment, the more favorable your terms. If you can purchase a home with at least 20% down, you won’t need to buy private mortgage insurance (PMI). Also remember that closing costs typically range from 3% to 6% of the purchase price.
Determine How Much You Can Afford
Consider your other expenses, and make sure you are saving enough toward retirement and other goals when deciding how much to spend each month on mortgage payments.
Consider Other Home Ownership Expenses
When considering how much you can afford to pay each month, in addition to mortgage payments, factor in costs such as homeowner’s insurance, property taxes, private mortgage insurance (if required), utilities, repairs, and maintenance.
Get Pre-Approved for a Loan
You’ve made some estimates, but pre-approval will give you a more accurate picture of how much credit a lender is willing to extend to you. Knowing how much you can afford will help you and your Realtor spend your time more valuably, shopping for homes that are truly in your price range. Additionally, when it’s time to make an offer, pre-approval sends a message to the seller that you are serious and prepared to buy.
Eric Storm
803-517-8791
