If you have saved up the money for a down payment on a mortgage and are ready to purchase your first home, there are some guidelines you should follow so that you will be prepared and can get the best deal possible. Read on for more information from this home-buying guide.
Consider The Type Of Home You Want
There are plenty of options available when you’re shopping for your first home. From single homes to townhomes and condos, you’ll want to consider the number of residents you plan on having and your space needs. If you need more space and want a larger piece of land, a single-family home is probably the best. Many young families and first-time home buyers opt for a townhome.
It’s also important to consider whether or not you are willing to put work in to renovate the home you buy. The experience of purchasing a fixer-upper will be vastly different from purchasing a home that is move-in ready. Additionally, consider the home features that are important to you. You may make a list of “must-have” features, like a finished basement, “like-to-have” features such as a porch or deck space, and “could-do-without” features like a walk-in closet.
You need to be sure that you have saved up a three to 10 percent down payment for your new house. Most mortgage companies require a 10 percent down payment, so that means if you buy a $100,000 house you need to have at least $10,000 saved back for a down payment.
You may be responsible for the closing fees and expenses when you finalize your mortgage deal and those can range from between two percent and six percent of the total loan amount. For example, your closing costs on a $240,000 loan will be between $4,800 and around $15,000. This is money that you may have to shell out on top of your down payment. Sometimes you can get the seller to pay these costs, but not always.
You will want to decide ahead of time on how much you want to spend or can afford for a house. You have to factor in your credit score and how much the interest rate may be on your mortgage loan to determine if the monthly payment is affordable for you. You should be sure to check your credit score ahead of time and strengthen your credit by paying off smaller bills if necessary before applying for a mortgage loan.
Explore Mortgage Options
You will also want to explore mortgage options from one of the top mortgage lenders. A seasoned mortgage lender will offer information about the different types of mortgage loans you qualify for so you will know where to apply.
If you possibly can, it’s a great idea to get a pre-approval letter for a mortgage loan before you even start shopping for houses. When you start shopping for houses, you should look in the neighborhoods in which you are interested in living while sticking to a budget that you have created ahead of time. You should go to several open houses at houses for sale in the area that you want to live in so that you will know what is available on the market currently.
With these tips, you’ll be well on your way to move-in day! Happy home shopping!