Consumers new to the home buying process may feel a bit like Indiana Jones, in that there are potential pitfalls and treacherous traps everywhere. If you are a first time home buyer, it's imperative to arm yourself with knowledge about the process, and take certain key steps to reach the decisions that are right for you and your family.
Here are some pieces of advice for first time home buyers that will prove to be priceless.
Save some cash first. It takes a down payment to buy a house, as well as other expenses that pop up such as new furniture and moving costs. Set aside a nest egg, preferably 20% of the home's cost. This cushion will save you stress and worry down the road.
Work on your credit score. A credit score can be one of the key components in how much interest you will end up paying for your mortgage. Pull a consumer credit report for yourself and review all details. Be sure to dispute any errors, get and stay current on monthly bills, and pay down credit cards as much as possible. Over time, these actions build a killer credit score.
Scope out a helpful lender. An experienced lender is one of your greatest assets. Find a person who makes you comfortable and thoroughly answers your questions. Avoid those who offer to cut corners or seem too busy to educate you on the mortgage process. You want to make sure your lender helps you find the right mortgage for you.
Get pre-approved. Being pre-approved for a mortgage helps you know how much house you can afford, and proves to sellers you are serious about purchasing. There is no downside to getting pre-approved for your mortgage.
Understand your mortgage options. There are many different types of loans with varying interest rates and terms. Spend time with your lender and ask questions to determine the one that best fits your budget, lifestyle, and long-term plans.
Don't cave to pressure. If you have a bad feeling during the process, it's vital to examine where it's coming from. Is it just commitment jitters, or is there an underlying issue in the purchasing process? If your realtor, lender, or the seller is pushing a decision that makes you uncomfortable, put your foot down until you are ready to move forward.
By following these pieces of advice for first time home buyers, you will enjoy a greater chance of ending up working with reputable people, and buying the right home with the best mortgage for your needs. For more first time home buyer tips and advice, download our helpful eBook now!