Buying a home for the first time can be an exciting yet daunting task but the process can be made smoother by doing some logistical groundwork. Being prepared for what you’ll encounter as a first-time buyer will prepare you for the home-buying process as purchasing a house is a major commitment, and most likely be the biggest purchase you’ll ever make. The following are 5 tips to guide you through the process of buying your ideal first home.
Check your credit
You should check your credit score well in advance of buying a house as it will give you time to fix any errors and improve your credit score ahead of time. A strong credit score means you’ll have a lower interest rate on your mortgage. Conversely, with a lower credit score lenders may require a larger down payment and charge you a higher interest rate on your mortgage. Your credit score affects your down payment options and final mortgage terms. Check with your bank to see if they provide a free credit score, or if they have any recommendations on where you can access one. Those with high credit scores (800 or more) face lower down payment requirements and enjoy a lower interest rate.
Be Open to New Neighborhoods
Even within the same city, home prices can fluctuate dramatically. One of the greatest determiners of price is location. If you are willing to look beyond a certain neighbourhood, you will be able to get a lot more for your money. With the recent rise in remote work (and if you recently transitioned to remote work), this will provide a wider home-searching area than before. Factor in choosing somewhere with an overall lower cost of living, and you’ll give yourself more financial room on your mortgage. It is essentially a balancing act between how much you want to pay and where you want to live.
Find the Right Mortgage Lender and Loan Type
Make sure you research different mortgage lenders such as banks, online lenders, and credit unions. In addition, look for a lender that’s easy to work with, knows the area you’re looking to buy in, and answers all your questions along the way. It’s also important to pay attention to the rate and fee differences between lenders, as these can differ among lenders even for the same applicant so ensure you get the best rate by shopping around. Even a small difference in the interest rate can save you thousands of dollars in the long run.
Budget other Costs
It is important to consider that a mortgage isn’t the only recurring expense. When buying a house, it is important to anticipate other costs such as homeowners’ insurance, property taxes, repairs, and maintenance costs. Maintenance costs such as lawn care, snow shovelling, and raking leaves can also add up to your overall expenses. So when a home may seem affordable on paper, it can become pricey in reality. It is important that you include all these costs and other regular expenses when considering how much you can afford to spend on buying a house.
Using a Realtor
Using a realtor to find your home is a trusted source for all your home-buying needs. They provide valuable expertise and experience, and are committed to a high degree of professional conduct that is consumer-focused. A realtor helps with the interpretation of the data, and helps a homebuyer with all the information to make an educated decision in terms of comparable prices in neighbourhoods. A realtor also helps with information regarding market conditions and the steps required to go ahead with a home purchase.
HW Realty Group is happy to guide you through the home-buying process. Call us today!