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As a first time home buyer, you must be excited. We understand the excitement but it’s important to keep in mind all the plans and strategies. You definitely don’t want to make any mistakes that might put you in financial difficulty. Take this article as a point of caution for any first time home buyer.
Think about what big companies do. Blue-chip businesses have their own team of planning and strategizing when they Bhai and acquire a new building. Similar is the case with an individual who wants to buy a new residence. It is like a big project and you need to make that experience at the light rather than financial stress on you.
Mistakes that you want to avoid
Below are the States that any first time home buyer might easily commit. This is a heads up for all the future property as parents that they dream of. We promise if you avoid these mistakes, you will find your first time home buying a delight.
- Not strengthening credit
If you think the broker would not check your credit before suggesting you a list of properties, you are mistaken. Many people do not take care of their credit rating before investing in big projects. Even if you want your preferred loan, your credit score is the first thing checked by banks and other parties. Not strengthening credit is the first mistake any first time home buyer will definitely meet. Here are the steps to avoid this mistake.
- If you are planning well in advance, pay all your bills on schedule and try to borrow as low as you can from your credit card balances.
- If you have multiple credit cards, this means you have more credit available to use. Keep them as it is as closing them would decrease your ability to borrow.
- Ask for free copies of your credit from the credit bureaus.
- Not exploring mortgage options
If you explore the market, you’ll find out multiple down payment options and eligibility requirements.
If you follow a conventional mortgage, it’s not regulated by the government. However, these give you an option of availing only 3% of a down payment.
The Department of Veterans Affairs also guarantees loans and these are available to veteran and current military members. They do not require any down payment.
Then comes the FHA loans that are regulated by the Federal housing administration and you can make down payments of as low as 3.5%.
- Not researching for home buyer assistant programs
There are many home buyers assistant programs for first-time buyers. Many states have such programmes that give you low interest mortgages and minimum down payment options. If you do not explore these options, you might be at a loss already.
- Not coming to a specific budget
Any smart investor knows how much he can invest. Your budget should be planned well in advance so that you can act accordingly while searching for new properties.
Basic terms to keep in mind
The list of a few terms that you should know and keep in mind while buying a home for the first time.
- Down payment
- Interest rates
- Credit score
- Closing cost
- Brokerage expenses
- Moving-in cost
The bottom line
You have read this article carefully, you are well equipped with information to carry out your first time home buyer process. Make sure to keep in mind all the mentioned points and terms.