For many people, buying their dream home may seem like a far-off, distant possibility. While buying a home does take some careful planning and financial discipline, it doesn’t have to be something you have to wait half a lifetime for. Getting the perfect house can actually be a reality for even first-time home buyers if you plan carefully. Here are three practical tips for making your first home your dream home.
Live Beneath Your Means and Save, Save, Save
All too often, when people get a significant raise or bonus, the first thing they do, is go out and buy a new car, get a bigger apartment, or expand their lifestyle to fit their new salary or financial status. Making sacrifices in advance can help you get your dream home the first time. Save any extra money you get and be careful to set some of your paycheck aside each month to help you reach your goals.
Clean Up Your Credit
The better your credit is, the better the loan terms you will get. Getting even a single percentage point lower interest rate can save you thousands of dollars both in up-front costs as well as in the long haul. Guard your credit carefully, your dreams may depend on it!
Pull Together a Large Down Payment
The more down payment you can afford to make, the more home you can afford. Keep in mind, if you put down less than 20%, your lender will often make you pay for mortgage insurance. Every dollar that is going towards that insurance, is less money you will have for your mortgage payment, which is just that much less house you can afford. In addition, putting down a hefty down payment also gives you immediate equity in your home, which gives you the option of taking out a second loan if times get tight. If you only put down the minimum down payment, you won’t have that option for many years.
Consider Hiring a Mortgage Broker
While hiring a mortgage broker may cost you more up front, it can save you thousands in the long run. Not only will a mortgage broker research all different types of loans for you, such as VA loans and programs for first-time home buyers, but they will also help you understand all the different terms and conditions to find the loan that is right for you.
With a wide range of first-time homebuyer benefits available, getting your dream home the first time out is not impossible. Of course, over time your dreams may change and that’s okay too. If you got your dream home once, you can do it again.