Once you decide to buy a house, you should do some research before you even start looking at properties. You should know what the mortgage rates are, how your credit score affects interest rates, approximate homeowner’s insurance and taxes for the area you would like to live in and know what kind of home you want. These first time home buying 101 tips will help you through the process and tell you what to expect when buying your first home.
You’ll find that when you research how to buy a home for the first time that it might seem overbearing. However, when you take it all one step at a time, it’s easier than you would think. Finding out how much home you can afford also makes the process easier and less stressful.
1. Check Your Credit Score
Knowing your credit score will help you determine whether now is a good time to buy your first house. The lower your credit score is, the higher your interest rate will be. And, if your credit score is really low, you may not be able to get a mortgage. You can check your credit score at Credit Karma or Experian.
2. Down Payment Options in North Carolina
Check into different types of mortgages and ask your bank or mortgage broker about different programs for a first time home buyer. FHA loans have low down payments and are easy to qualify for, but you’ll have to pay private mortgage insurance. A conventional loan may require anywhere from 3 to 20 percent down. VA loans are for veterans only, but if you are a veteran, you could get a loan with little down. If you’re in a rural area, you may qualify for a USDA loan with a low interest rate and no money down. You must have low income to qualify for the USDA loan. In addition to the down payment, you may need additional cash for private mortgage insurance, closing costs and other costs.
3. Stop Applying for and Using Credit
Don’t apply for credit and use a little credit as possible before you apply for a loan. Every time a lender checks your score, your credit gets knocked down a couple points. It’s only temporary, but you want as high a score as possible when applying for a mortgage.
4. Get Pre-Approved
One of the best home buying tips and tricks is to get a pre-approval letter from a lender such as Roy Anderson at Georgia Banking Company,Andrea Kindley at Fairway Mortgage or Paul Carini at Primary Residential Mortgage. These brokers are experienced with lending in the area and will be able to help you find the best loan and first time home buyer discounts for your situation. On-Point Carolinas Realty works with these and other professionals to ensure your closing goes as smoothly as possible.
5. Find a Home that fits your future needs
Once you find a home and have a signed purchase agreement, you’ll need to order home inspections. Although the seller is supposed to disclose problems with the house, many don’t – they don’t even tell the realtor. Ordering home inspections protects you by keeping you from purchasing a home that has too many problems.
You may find the perfect home and the inspector may find a few things wrong. If those things are minor and you love the home, sometimes you are able to negotiate with the seller for credits or repairs. Keep this in mind when you are buying a home for the future – a home that you can grow into if you decide to have a family or a home that will accommodate grandkids if you are considering down-sizing.
As part of the home buying process, be ready to lose some offers. Often several people make an offer on a home and the seller has to pick one. Just because your offer is higher doesn’t mean the seller will pick yours. Other factors are considered, such as time to closing, cash purchase and more. In some cases, you may be outbid.
6. Contact On-Point Carolinas Realty
When you are ready to buy a new home, learn more about how to qualify first time home buyer online or stop by our office at On-Point Carolinas Realty.