Your first time buyer home mortgage in California has been approved, and you are ready to purchase your dream home. Do not hurry, here are 12 first-time homebuyer suggestions to keep you on schedule if that is your next step:
- Be familiar with your credit report contents.
Lenders consider more than just your credit score when making a decision on a mortgage application. They check your credit record for debt, payment history, and financial security.
Your credit score and the record will be used by the lending institution to decide the interest rate you will be offered. In most cases, a reduced interest rate corresponds to higher credit scores.
- Create a financial plan.
Think about how many homes you can afford by carefully reviewing your monthly revenue and debts.
- Plan ahead and put away money for a down payment.
A 20% down payment takes the typical American purchaser about 6.5 years to save for, so it’s wise to get a head start.
Check out applications like Chime and Acorns, which can simplify the process of saving for a down payment or other home-buying expenses by directing money into a special savings account for you.
Review your money plan too. Cut your expenses and put the money in a high-yield savings account or stock account. This could potentially help your money develop at a faster rate.
- Recognize the unforeseen expenses of house possession.
Homeownership adds to your debt and costs. Insurance, taxes, homeowner’s club fees, and utilities are all expenses. Unexpected maintenance costs are another issue.
Before buying a home, estimate costs. Municipal records show your property tax history. Additionally, having quotes from insurance and energy firms can help you project your costs.
- Put in a bid only after you’ve been pre-approved.
A mortgage pre-approval memo verifies that a lender has allowed a buyer to borrow a certain amount. A banker pre-approval document in your offer bundle can help you win a buying war.
Get bank pre-approval before home hunting.
- It is recommended that you look into FHA, FSA, and VA financing, among others.
FHA, FSA, and VA loans can help low-credit borrowers with low down payments. These require low down fees, making home ownership more affordable.
FHA loans are national, while USDA loans with no down payment are limited to farming areas. VA loans, which demand no down payment, are only available to military members, soldiers, and their families.
- Look into first-time purchase aid programs
Many local and state housing groups give first-time buyer help programs to reduce the financial strain of buying a home. These schemes may help with down payments and closing costs.
Your living options may vary by area, so consult your housing office. Your real estate agent may also help.
- Shop around for the best interest rates
Before choosing a loan, compare credit rates.
To compare APR, fees, and loan costs, get loan quotes from at least three and ideally five lenders (both up front and over the life of the loan).
- Maintain a steady financial history.
Avoid making any large purchases or establishing any new credit accounts while getting pre-approved for a mortgage.
Closer to closing, your lender will re-pull your credit report, and any changes could result in a higher interest rate or additional fees. This is particularly true if the changes show that you are not good at handling your money.
- Spend your money slowly.
Buying a home requires many upfront costs, but you shouldn’t go into debt. Doing so puts you at risk and leaves you unprepared for unexpected costs.
Instead of emptying your crisis fund, save in a separate account. It may take a while to save up, but knowing you have a backup will help you relax.
- Hire a Real Estate Professional
Buying a place alone is possible, but not advised, especially if it’s your first. An expert agent can study areas and homes, arrange trips, negotiate prices and terms, and write contracts.
Meet numerous area agents and ask friends, family, and coworkers for leads. Check for compatibility before hiring someone.
- Hire a reliable house auditor.
Consult a home inspector. They’ll assess fire hazards and home upkeep for a few hundred dollars.
You can then use their report to ask the seller to fix the issues or give you the money to do so.
An evaluation ensures you’re getting your money’s worth and buying a safe, well-maintained home.
