If you are considering buying your first home, you are probably incredibly excited. This is great, and you should be. Owning a home is the pinnacle of the American dream. However, there are facts you should understand before jumping into it. Here are four things you should know before you buy your first home:
What It Does to Your Finances
When you buy a home, it is going to have a large effect on your finances. At first, you might see a credit hit when you are trying to get a loan for it. If this is a surprise to you, that’s okay, but you will want to research more on how a credit score works. The key to understand is that your credit will actually go up over time once you start paying your house down each month without missing payments. Thus, buying a home is very advantageous financially.
How to Afford It
If you want to afford your new home, you might be wondering what your options are. First and foremost, make a budget right now based on your monthly spending. Then, look to areas that you can cut out without sacrificing too much. This might include eating out less, going to fewer concerts, or avoiding new gadgets that you really don’t need.
How to Budget for Home Improvements
Many first time homeowners are shocked by the cost of home improvements they need to do on the home. There is everything from yard maintenance all the way to the big ticket items like roofing, doors, and windows. Make sure you budget for these in advance and understand your general costs before they blindside you.
Loan Types for New Couples
New couples have various loan options. But before you approach a lender for a loan, you want to make sure your finances are in order. Then, you can go through the process of pre-approval, which means that the lender has looked at your financial details and determined that they would almost certainly take you on as a client. After pre-approval, you can see if you can qualify for an FHA loan.
Even if you are not married, you can both qualify for something called an FHA. It is typically easier to qualify for and offers better loan terms. While conventional, VA and other loan types are available, you might need to put more down for those. If you have less than 20% as a down payment, the FHA can be the greatest option for you
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