You’re through with the days of living with your parents, renting apartments and dealing with roommates. You’re moving on to the next stage of life and you’re ready to become a homeowner! While the process can be daunting and the hunt for the perfect house doesn’t always run smoothly, here are a few tips for first time home buyers. You’ll have the keys to your new front door in no time.
Research Selling Prices in Your Area
Use a multiple service listing (MSL) service to determine the average cost of homes in your desired area. Do your research of potential homes in your area and use a mortgage calculator to see how much your mortgage payment would be if you were to purchase the home tomorrow. Comparable prices will set the range of what you’ll face with your mortgage in terms of affordability.
Check Your Budget
A recent survey stated that 55% of homebuyers will go over budget. Your budget will drive your finances, and ultimately your quality of life. To avoid debt and a paycheck-to-paycheck lifestyle, make sure you don’t go over budget. Don’t forget to account for the unforeseen circumstances, unexpected delays, closing costs and ensure that you won’t overspend yourself.
Be sure your monthly payment aligns with your other monthly payments. Because your mortgage payment will affect your credit, you want to make sure you never have a month where a payment can’t be made.
Check Your Credit
Your credit will determine the mortgage loan and how much is available to you. There are steps you can take to prepare your credit for the process of applying for a mortgage. You’ll need at least 2 tradelines depending on where you get your mortgage. Credit cards such as a Mastercard or a Visa, student loans, and car loans are just some of the tradelines you can use if you have lines of credit open.
Keep credit cards open even if you don’t use them. The older a line of credit is, the better the your credit score will be if you made payments on time.
Find the Right Mortgage Lender
When borrowing money for your mortgage, you want a lender that you can trust. Not only is integrity a key factor that you should account for, but you also want a lending company that doesn’t have a complicated process that will run you back and forth to make everything happen.
Buying a home for the first time can be exciting when you’re prepared. If you’re on the market for a new home, this is all you need to be sure you’re ready.