Buying your first home is an exciting journey! However, it is important to remember that if you are buying a home for the first time, you are about to make an important financial decision and investment. Purchasing a home can be a great way to invest your money, but educating yourself on the home buying process will help ensure that you find the right mortgage and house for you. Below are some of the most important first time home buyer education tips to prepare for and navigate the process.
Review Your Credit Standing
Your credit is extremely important during the home buying process and plays a role in the approval, the terms and the conditions of your mortgage. If you are thinking about purchasing a home, be sure to check your credit at least 6 months prior to applying for a loan. Be sure to look for outstanding payments, errors or issues that can be resolved before applying for a mortgage.
Evaluate Your Spending & Prepare a Budget
A budget is a financial plan or road map that guides your income and spending plans. Through your budget you can discover areas where you need to cut down spending and possible areas where you can save more money to adjust to your lifestyle. Making a true budget based off of your income, cash flow, and spending will help you best identify what home you can afford.
A good budget will help you:
• See your spending pattern
• Stop impulse spending
• Save more money
• Evaluate what mortgage you can afford
Purchase a Home You Can Afford
When shopping for your new home, one of the first things you should have in mind is what you can afford based on your prepared budget. It is important to create a list of properties you want to view based on the price range you’re comfortable with. A realtor can help you narrow down a list of properties that meet your budget criteria as well as other personal factors that play into your purchasing decision.
Securing a Mortgage
Once you have managed your credit, created a budget, determined the price range you can afford and found your dream first home, it is time to apply for a mortgage. It is important to work with a lender who can help educate and guide you through the process while helping you identify the mortgage product that is right for you. Be sure that you thoroughly understand the terms and conditions of the mortgage, the type of interest rate associated with the mortgage and what your down payment will be prior to signing the contract.
Purchasing your first home is an exciting life milestone and first time home buyer education can help make the process as smooth as possible. For more first time home buyer tips and information, download our eBook now!