Thinking of buying your first home? That’s exciting! It also can be a little bit scary – first-time home buyers face a big financial commitment and tons of new information.
Here are 5 tips to help first time home buyers before you start your house hunting journey!
Start saving early if you can & know your finances.
Start saving by slashing expenses and creating a budget to help you reach your goal. It’s usually a good idea to save up as much as you can, as the bigger the down payment, the smaller the mortgage and interest charges! How much you owe will affect how much you can borrow. Financing a large new purchase before you get a mortgage (a new car, for example) reduces your loanable amount.
Get to work on your credit score ASAP!
Your credit score plays a role in getting a mortgage. Almost everyone has room for improvement. Start by paying off or paying down credit cards: the higher your available credit and the lower your utilization, the higher your score.
Pre-approval, pre-approval, pre-approval.
What house can you afford? When estimating your monthly mortgage payments that you think are doable on your income, have you factored in other expenses such as insurance, property taxes, utility payments, and maintenance costs? Your Mortgage Broker will help you understand the maximum mortgage you qualify for. Pre-approval is key! Make sure you have a mortgage broker who will work for you and has reviewed all of your documents so that you know how much purchasing power you have.
Choose a reputable Real estate Agent and Mortgage Broker.
For many, buying a first home is uncharted territory; therefore, it’s incredibly important that you are represented by a professional agent with a good track record. It’s also important that your real estate agent/mortgage broker is very knowledgeable in the market you’re planning on buying in.
You should have an idea of what type of home you’d like to purchase. Create a list of everything you want and identify your “must haves.” List details that are important to you like the number of rooms, preferred location, style of the home, square footage, etc. Having a list of what you want in advance will narrow down your search and help target property listings that match your search criteria.