Many people, at some point, will purchase a home. Some will purchase more than once in their lifetime. When you are a first-time homebuyer, it can be challenging to know how it works and what you should do to be a savvy homeowner. Here are ten things you need to do when you are a first-time homebuyer.
Analyze the pros and cons of buying a home
Owning a home can be a rewarding experience, but it is essential to be prepared for this important milestone. Carefully analyze the pros and cons of buying a home or continuing to rent and decide if buying a home is the right decision for you and your family.
Analyze all aspects
Although buying a home can be rewarding, it can also involve much work and be expensive. Leaking leaks, pipe problems, and other repairs imply expenses that accumulate. When determining if you are prepared to own a home, consider the cost of general maintenance tasks and unexpected expenses.
Check your credit
Analyze your credit report and your FICO score. They will affect the total cost of your loan. Once you obtain your free annual credit report, please review it carefully for errors or unresolved issues. Contact the appropriate credit reporting office, Experian, Equifax, or TransUnion, to request a correction. You can obtain your credit report from each of these agencies if you visit AnnualCreditReport.com.
Your Mortgage loan agent can help you determine the loan amount for which you may be eligible through a preapproval process. Being pre-approved before looking for a house is particularly useful because it helps you look for homes within your price limits. Real estate agents also value buyers who send offers for a house with a preapproval letter. You can access our preapproval form to start.
Prepare a budget
While preapproval allows you to calculate how much you may be able to borrow, being comfortable with what you have to pay per month is just as important. Before applying for a loan, especially a loan of the size of a mortgage, it is essential to determine how much you can pay per month.
Analyze all current monthly expenses, plus how much you save per month. Spending no more than 28% of your monthly income on housing expenses, including mortgage, taxes, and insurance, is advisable. With a mortgage calculator, you can estimate the cost of the monthly installments and put together a budget that is appropriate for you.
Do not forget taxes and insurance
Contact a local insurance agent to prepare a quote using a comparable property in the area you are looking to buy. To better understand how much you will pay in taxes, check the tax assessor’s website on the local property. Remember that the amount of taxes an owner pays and what you may have to pay may differ depending on the exemptions granted under local tax legislation.
Make an initial payment
Most mortgage programs require an initial payment for the purchase of a home. The initial payment amount required varies according to the type of mortgage program.
Start the housing search
Decide the place and think about the characteristics you want for your home. Look at local notices, compare prices for similar homes, and ask your real estate agent to help calculate the amount you will have to pay. If you have not yet consulted a real estate agent, check with your friends, neighbors, or local real estate agent association to help you find a specialized housing option in your area.
Loan application process
In addition to deciding the type of mortgage you want to take out and calculating your interest rate, gathering the required documentation is a fundamental step that saves you time and frustrations along the way. To ensure a smooth loan application process, you probably need to gather the following:
- Name and address of the employer (s) of the last two years
- Payment stubs for the last 30 days to account for your income for the year to date and current period, in addition to any additional income support documentation
- Statements of checking, savings, retirement, and investment account for the last two or three months
- Documentation of your credit cards, loans, and other debts
Close the deal
Once you find the house of your dreams, there are certain instances related to closing the deal, such as negotiating the purchase price, requesting an appraisal, and scheduling an inspection. Once you agree with the seller, you should consider the closing costs.
It usually includes start, title, settlement charges, taxes, and charges paid in advance, such as owner insurance and neighborhood association fees. Your real estate specialist can help you calculate all costs related to the property.About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.