Buying your first home can be a challenge, especially if you’re not prepared for all the financial obligations and steps leading up to making an offer. It can be a confusing journey, so here are a few tips for first home buyers, to make this process as painless as possible.
Down payments can get pricey depending on the cost of the home. 5% down on a home that costs $200,000 is $10,000, and payments can vary to any amount. Make sure you start saving early to avoid boxing yourself into a lower budget than you’d anticipated. There are down payment calculators to help you in setting an accurate goal for how much you need to save.
While on the subject of saving money, new or first home buyers often save enough to buy a house, put a down payment in and pay other fees. However, they forget to save money for the post-move-in expenses. Things like furniture, possible appliance upgrades, decor and home improvements that need to be made cost money. Make sure you save for those expenses.
Check Your Credit Score
Having good credit is a key factor when applying for a mortgage loan, or any loan for that matter. Your interest rate and possible loan terms partially depend on that score, so check your credit before starting the house buying process. If your credit score isn’t the best, find ways to improve it, like making higher payments towards outstanding debts. If you’ve already applied for a mortgage, don’t open any new lines of credit, to avoid having your score drop.
Explore Your Options
There’s never just one way to do something as complicated as determining your down payment amount or monthly mortgage payment. That’s why it’s important to look at your options and talk to a financial adviser or mortgage broker. This way you don’t agree to something you don’t understand and can’t afford.
Determine a Budget and Stick With It
This may be obvious, but looking for your dream home before determining a budget you can afford isn’t the best idea. Finding and sticking to a price range you’re comfortable within will make the payments after you’ve purchased the home livable. Looking for places below your price point is even better, in case you get into a bidding war or have to renovate. Remember, your first home isn’t going to be your forever home, so stick to something you can comfortably afford, with room to save for the next house.
Hire the Right Real Estate Agent
Hiring a real estate agent who’s experienced, motivated and highly knowledgeable is an asset every homebuyer should utilize. They can save you from overspending or buying in a hard-to-sell area later on.
There’s always room to negotiate house listing prices, as the sellers want to sell quickly. Don’t offer anything low enough to be considered insulting, but stick to a price that saves you money for any renovations that may need to be done or unexpected moving expenses.
Get a Home Inspection
The last thing you want is to first home buyers, forgo having it inspected by a professional housing inspector, and discover expensive problems that can affect your health and safety. Sellers want to sell their house no matter what, and may not disclose issues with the home that would prevent that. A home inspection can be the difference between sticking with the home or rescinding the offer and moving on.
Operating in Edmonton, Alberta since 1991, Mortgage Makers prides itself on providing the best rates and mortgage benefits available in Canada. Serving is our biggest asset as we’re available to meet our clients at their convenience, any time, anywhere. We’ll guide you through the entire financial process, so call and talk to a professional mortgage broker today.