What You Should Know When Looking for a First Home

There is nothing happier or scarier than buying a home for the first time. It can take years to find the home you want to purchase and almost as long to find the financing you need to get into the home. There are a few tricks that will help you to get the kind of home you are looking for and make it affordable. You will need to make sure that you are aware of what your budget is when looking for a home, get a good rate on your mortgage, and ensure you have the right insurance for protecting your new home. This will help you to enjoy it faster than you might have thought possible.

Learn What Your Home Budget Is

One of the biggest mistakes many new home buyers make is to start searching for a new home without a real idea of what their budget is. The last thing you want is to find the home of your dreams, only to find that you cannot afford the monthly payments or that you cannot get the financing to purchase it. This is why such financial guru like the Wall Street Journal recommend that you get approved for a loan before you start shopping. Pre-approval is different from pre-qualification, so make sure you know the difference. In pre-approval situations, you actually have your credit run and you have secured the loan. This is not the case with pre-qualification.

Dream Home

Dream Home

Get the Right Mortgage Rate

The best mortgage rates are going to help you save a lot of money. The lower the rate is, the less money you will pay for your home. After all, the first decade you are paying for your home, you are guaranteed to be paying more on the interest than on the actual principal. Minimize the amount of time you are paying the bank by getting the best rate possible. The kind of rate you get will depend a lot on the kind of company you are getting the loan from. Some can offer better rates than others thanks to a high degree of competition in the market. Make sure to ask around about what a normal rate for your credit rating would be.

Protect Your Home with Insurance

Insurance on your home is required by most lending companies anyway. Other than getting home insurance, you might also want to think about getting mortgage insurance. Even if your mortgage company does not require this from you, consider getting it as a way to protect yourself and your home. Should anything at all happen in which you are not able to pay your mortgage, you can use this insurance to protect yourself from losing your home. Many home buyers will avoid this as they feel it is an unnecessary expense, but when you are having trouble paying the mortgage because you got laid off, you will be very thankful that you have the protection it has to offer.

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Comments

  1. Yep, I see it too. So many first time buyers rush out to buy before setting a budget. They get the “shiny object syndrome” and start looking at houses waaaay past their budget.
    It’s best to get your finances in order long before you go house shopping!

  2. Knowing what your budget is an important part of buying a home, many people let the mortgage or real estate person determine what they can afford. Knowing what you can afford is extremely important.

  3. One of the best rules of thumb in buying a “starter” home is to go for something one can easily afford and which won’t stretch the budget too much and then upgrade with time and as one financial situation changes. After determing your budget…shop around as much, compare incesstantly until u get the best deal for your finacial situation.

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