Though real estate is commonly regarding as a sound investment, there's something personally fulfilling about having the keys to a home you own. If you have dreams of homeownership, it's time to turn those dreams into reality. Here are a few tips all first-time homebuyers can benefit from to make sure that their new home suits their finances and lifestyle.
1. Apply for a Mortgage Before You Shop for a Home
If you've never purchased a home, it may seem logical to find the home you want to buy and then apply for your mortgage. However, it's actually recommended to secure your financing before you even think of checking out homes for a few different reasons.
You can't start shopping for homes until you know how much the bank will approve your mortgage for. Once you receive your loan pre-qualification, you still need to make sure that your potential mortgage payment suits your budget; remember to take into account all your expenses, including daycare bills, pet expenses, and expenses related to your hobbies.
Another reason to procure your financing before browsing potential homes is so that you're in a better position to make a strong offer if you find a home that you love. Sellers generally prefer buyers who have already secured their financing. You don't want to have to spend time applying for financing, as this makes it possible for someone else to swoop in and make a successful offer on your potential home.
2. Up Your Savings Goal
You know that you need to have some savings in order to cover the expenses associated with purchasing a home, like paying for your down payment, buying homeowner's insurance, and covering your loan fees. However, it's likely there are some types of expenses that you're overlooking, such as the cost of furnishing your property or expenses related to transporting your belongings.
Your lender may require you to establish an escrow account for paying your property taxes and homeowner's insurance; this usually requires you to put at least two months of tax and insurance payments into the account as a reserve, in addition to any funds to ensure your savings for these two items is on track. Focus on boosting your liquid savings; you can always use the funds for other items after you find a home if it turns out you don't need them.
3. Evaluate the Neighborhood and the Home
When browsing homes, make sure to also evaluate the neighborhood, as the neighborhood can influence your property value and your potential happiness in the home. You want a neighborhood with characteristics that are important to you, like a low crime rate, a sense of community, or highly rated schools. Don't focus so hard on the homes that you neglect to take in the surroundings.
To learn more, contact a company that offers loans such as first-time home buyer loans today.