4 First-Time Home Buyer Tips You Should Know

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Home Buyer Tips

If you’re searching for a new home, you might feel completely overwhelmed and underprepared. What’s escrow? What’s my budget? What if my credit is bad? These could be some of the questions running through your mind as you consider buying a home. Luckily, there’s plenty of resources on the internet that can help you figure it all out and guide you through the process. In this blog post, we’ll walk you through some of the major tips and tricks you should know when you’re going to buy a house. Take a deep breath and let’s dive in!

Get Familiar with Financing

First thing’s first – you’re going to need money in order to buy a house. Surprise, surprise! But, in case you don’t have the full cash amount in hand to buy your home outright, consider your financing options

  • Traditional mortgages: Conventional mortgages have strict requirements for both your credit and income. However, this is still the most popular type of home loan.
  • USDA loans: If you want to live in a rural area in the United States, you might be able to get a USDA loan.
  • FHA loans: An FHA loan helps homebuyers who don’t have perfect credit and can’t afford a large down payment.
  • Native American Direct Loans: If you’re a Native veteran, active military, or your spouse is native, you may qualify for a Native American Direct Loan. This loan is disbursed directly from the government and covers property purchased on federal trust lands.
  • VA loans: A VA loan helps veterans and service members who want to buy a home for $0 down. Private lenders give out these loans but they’re back by the U.S. Department of Veterans Affairs. Make sure you know if you qualify and that you understand how to apply for a VA loan before attempting to fill out the paperwork yourself.

Make Sure You Can Answer the Important Questions

Before you buy a house, make sure that you know the answers to the questions below:

  • Do I know the difference between my wish list and must-haves for a home?
  • What’s my budget?
  • What neighborhood do I want to live in?
  • Do I have money set aside for closing costs?
  • Do I have money for moving expenses?
  • Can I afford the property taxes?
  • What kind of repairs are acceptable to me and what’s a no-go?
  • Do I want to buy a fixer upper or a move-in ready property?

Check Your Credit and Get Rid of Debt

Long before you start looking for houses, shore up your credit. Try to pay off your credit cards, your student loans, your car loan, and anything else that might be dragging down your liquidity. Continue to pay your bills on time and pull your credit report. Make sure there are no errors or outdated information. Remember, you can get your credit report for free three times a year from each of the credit reporting bureaus. If you do spot any mistakes, make sure to dispute them with all three credit bureaus.

Keep all of your old credit lines open, especially if they’re older. The length of time you’ve had a credit account and the amount of credit in comparison to your debt is a major factor in determining your credit score.

Basically, use the time before you want to buy a house to prove your creditworthiness. Home lenders want to see homebuyers that have stable employment and show evidence of responsible payment behavior.

Get Preapproved

A mortgage preapproval letter is a home lender’s agreement to service a loan amount based on certain conditions. This letter is like your golden ticket. It shows that you’re a serious buyer and can give you a serious advantage in a crowded real estate market.

Finding and Buying Your Dream Home the Right Way

Buying a home is a milestone for millions of Americans – but that doesn’t mean it is stress-free. Make sure you do your due diligence and get all the important research and paperwork done. Start planning as early as possible by shoring up your finances. Don’t wrack up tons of credit card debt and consider holding onto your job – even if you have another job offer in hand. The idea is to project stability and financial security. With these tips, you can find and finance your dream house with ease.