Buying your first home is not always an easy endeavor, but you can make it go smoothly by learning a little bit about what to expect when it comes time to do more than just look at a home. However, you may want to keep these things in mind when you are looking so you can easily cross homes off your list that will not meet your requirements.
This is always the first thing that you should consider when you plan on buying a home. Always think about the most that you are willing to spend on a house. Then factor up 20% of that price. That will be the down payment you will need to make and it could possibly be more. Every situation and lender is different so do not count on your rate being the same as others have reported from the same lender. Be prepared to save for the down payment either way.
Check your credit often and make sure that everything listed in your credit history is correct. If you want to improve your credit score, speak with a credit counselor on how to you can start to increase your score and give you a better chance at home loan approval or a better home loan package.
Your credit score plays a huge part of any loan process so be sure that you are also aware of what open accounts you may have on your credit history. Lenders will be checking to see how often you have on-time payments as opposed to late payments. They will also check to see what your overall debt is on your credit history.
Consider the fact that you will have to make a monthly mortgage and be prepared to save for that as well. This is completely separate from your down payment and closing costs. To get an idea of your monthly mortgage payment, you can use online mortgage calculators or speak with different lenders to get an idea of what to expect as a monthly payment.
Also, not all mortgage payments are made each month. There are some lenders who will have 30 day, 3 month, or even 6 month payment schedules. Make sure you ask about this when speaking with lenders so that you will know when to expect to make a payment on your mortgage.
This is usually a certain percentage of your home loan amount. You will need to save for this as well, but also make sure that there is an understanding and agreement between you and the seller on who will pay what fees.
You will need to look into home insurance and property taxes as well. You can research property taxes of similar homes in the area and also see if the home is considered to be in a flood zone. If so, you will also need to look into flood insurance for the home.
Keep in mind that there are some neighborhoods that have associations for home owners and may charge a fee to live in that area. Make sure you know about the area you choose to live in so that you are aware of these types of fees before you get too far into the home buying process.
While this comes just before moving into your new home, you need to think about these bills as well. You will have to consider water and sewer, electricity, and gas. There may even be charges for trash pick-up in the area as well. You can research average utility bill amounts just by looking online.
Look into what is being offered in the specific neighborhood that you have chosen. This can help you get an idea of the types of bills you can expect to receive from different services that may be offered in the area. You can factor this into the overall amount of money that you need to save before starting your home search.
Owning a home is not like renting an apartment. When it comes to keeping up the home, it will be your sole responsibility. Some of the maintenance work that can be considered would be window treatments, new paint jobs, new carpeting, keeping the yard trimmed, and handling any repairs that may come as well. Always factor this in when you take a look at each home.
You should always take all of these things into consideration and factor the fees and bills into your budget. Having a budget in place when buying a home is a great way to know exactly how much money you have to provide towards a new home, the bills that come with that new home, and any extra expenses that come up during or at the close of the home buying process.