Purchasing a new home can be an overwhelming task, especially if it’s your first time. However, there are millions of people who have successfully purchased houses before; meaning you can get through this process smoothly with a bit of planning and education. Notably, after doing your homework well, you will have a good chance of qualifying for and finding the home of your dreams. If you are a first-time house buyer, there are several steps you need to consider before jumping into the real estate market and choosing your dream home.
Review Your Financial Health & Savings
Before falling in love with houses, it is important to do a thorough audit of your finances. At first, you should look at your savings. Notably, you should not buy a home if you possess an emergency savings account which has three to six months of your living expenses. Additionally, you need to also make sure you have some sort of a down payment saved to put down on your mortgage. However, there are also down payment assistance options such as PMI and programs that can help with this.
After this, you should review the amount that you spend every month which will help you determine the amount that can be allocated for a mortgage payment. You should ensure that every dollar that you spend regarding clothing, miscellaneous spending, regular savings, children activities, retirement savings, and entertainment is accounted for. If you create a true budget for yourself, you will know what type of mortgage payment fits your budget.
Look Into First Time Home Buyer Programs
Before choosing your new home, you should do a bit of research about first time home buyer programs that provide incentives for first time buyers. You can also research and choose a mortgage lender that can help you look into the right mortgage options for you.
Choose & Meet with a Lender for Pre-Approval
Research and choose a lender that is reliable and will help you throughout the mortgage process. Upon meeting with a lender, you’ll want to gather important financial documents so that they can help you find a mortgage that fits your financial and home buying needs. Additionally, it is important to get pre-approval from your lender so that you know you will have financing and also because potential buyers with pre-approval usually get preference from the seller.
These helpful first steps in buying a house will set you up for lending and home buying success! For more first time home buyer information, download our eBook now!