A Few Tips for First-time Homeowners

Top 3 Reasons Your Home Warranty Claim May Be Denied

Last Updated on April 28, 2024 by Umer Malik

Buying a new house neither in the past nor in the present is an easy task to do. With the thought and process of buying a house, here comes a lot more issues and confusion. There might be something that you might not understand or simply could not handle by yourself. 

We know that you are excited but there is a little nervousness too. So, keep calm and simply check if you have gone through all these steps before making a deal or literally signing the papers.

Therefore, you need to put in some effort to start looking for your ideal home before preparing yourself to buy a house. Here are some additional things we believe you need to be aware of before starting the home-buying process.

Pay off all the Debts of Yours

When you asked for advice for first-time home buyers, I doubt you anticipated this. But it is unquestionably the most crucial thing to know about.

Owning a home is significantly more expensive than renting because when you own a home, you will be in charge of each and everything. In such a condition, if you are already in debt, then who knows-how would be able to handle such a situation.

So, you must get out of debt and start saving for an emergency fund of three to six months’ worth of expenses before you even consider purchasing your first home. This is how you would be able to deal with ongoing payments and unforeseen expenses.

Put Money aside for a Deposit

An offer made in cash only is the best down payment. A quarter of homebuyers pay cash for their properties. 

Aim for a 20% down payment instead if you feel that is more appropriate for your first home. In this manner, your lender won’t require you to pay for PMI. Try to avoid this nonsense because PMI is insurance that only protects your lender and not you if you default on a payment. 

And, seek ideas to spend less on closing costs too. 

Avoid the Worst Mortgages

Being a first-time home buyer has many advantages, including the fact that you haven’t fallen for a bad mortgage. You are lucky since you don’t have to fall into one.

Many first-time home buyer loans only require a small down payment, but over the course of the loan, they end up costing thousands of dollars more. So, don’t just be fooled by it! 

Just keep in mind that if it seems like a good deal to you but it is not. To not fall into such a trap, all you have to do is avoid this low-to-no down payment mortgage options:

  • Adjustable-Rate Mortgages (ARMs)
  • Federal Housing Administration (FHA) Loans
  • Veterans Affairs (VA) Loans

Find the Ideal Mortgage

The following mortgages may be suitable for you in finding one ideal mortgage case. 

Faster loan repayment – In this case, the monthly payments for 15-year loans would be higher than those for 30-year loans. But it will make you pay off your mortgage in a very short period of time. Additionally, the majority of 15-year loans have lower interest rates, saving you a ton of cash.

Locked-in interest rate – With a fixed-rate loan, your interest rate remains constant over the course of the loan, resulting in lower interest payments and greater predictability.

Of course, Find a Comfortable Lender

When you step into the real world, you find almost all sorts of people. There, you find some lenders only caring about profits, while some might actually care about helping you become a homeowner

Therefore, consult at least three or four lenders before taking out a loan. To find the best option for your finances and peace of mind, compare their interest rates, fees, and customer service.

Also, Make sure to get preapproved for a loan before house hunting.

Find a Trustworthy Real Estate Agent (just like the lender)

The most crucial component you require when purchasing a home for the first time is a person, a real estate agent. You can find the ideal home and get through the purchasing process with the aid of a competent real estate agent.

Get the task done in an easy way.

Be Clear on What you Want 

Let’s say that you are all ready to buy a house, but what if you don’t know what you want or need in that house. Don’t worry though cause it happens a lot. So, take your time and list out what you need in your houses like an innovative kitchen, bathroom, and outdoor spaces.

Finally, Looking for a House

Now, here comes the field visit work. 

After doing a quick online search, you get the list of things you’ll need for your home and head out to look for a place.

Although the MLS is not available to home buyers, your real estate agent can use it to guide you to the majority of available properties in your area.

Research neighbourhoods in conjunction with that. In order for you to not regret migrating there. 

Additionally, you should consider the long-term advantages and, yes, exercise patience while looking for a home. Because it takes time to find the ideal home.

Make a Competitive Offer (within your means) 

Knowing how much to offer for your first home can be challenging. At that point, you should rely on your real estate agent’s knowledge.

Ask them to assist you in submitting a competitive offer that fits within your spending limits and is close to the house’s market value. Just don’t make an impulsive offer you can’t afford.

Close the Deal by Making it Yours (house)

You can finalize the purchase of the home after the seller accepts your offer. The closing procedure typically takes 48 days. Your real estate agent will assist you with the last-minute components of the home like:

Obtain a home inspection and appraisal.

Get title and home insurance.

procure a mortgage

Finish the walkthrough.

Sign the documents.

Read More: How to Choose a Mortgage: Everything You Need to Know