Being a first-time homebuyer feels exciting. Like any big project, you need to ensure the right approaches, and avoid making mistakes that would result in lifetime regrets. The home buying process is all about getting the details straight from the beginning to completion of the home buying process. Are you still searching new homes St. George Utah? This post explains how first-time homebuyers can ensure a successful home buying process. Keep reading to discover these critical secrets.
1. Start Saving Early
Buying a home involves a significant financial commitment. You need to ensure you have enough savings to pay various costs involved in purchasing a new home. Here is an overview of the costs to think about as you come up with a savings plan geared towards buying your dream home.
- Down Payment: Mortgage lenders require that you clear a down payment before the mortgage has been approved. The amount of down payment will depend on the loan type and the total cost of buying a home. Conventional home loans ask a down payment of 20% while the down payment assistance programs can be a no down payment or a low down payment plan. Talk to a mortgage broker near you for advice on different mortgage types and the down payment requirements.
- Closing costs: This refers to the fees and the expenses you will need to pay to finalize the home buying mortgage. The closing costs will range between 2% and 5% of the total amount you plan to borrow. Homebuyers can ask the mortgage company to assist with the payment of the closing costs.
- Move-in Expenses: You need to finance the move-in after you are done with purchasing a new home. Ensure you set aside some money to cater to the moving truck and storage costs that may come with the move.
Therefore, you must develop a good savings plan to ensure you can afford the expenses we have listed above.
2. Seek Mortgage Preapproval
The mortgage preapproval letter guides the homebuyers when it comes to searching for a home. Besides, the property sellers are keen to look out for the property buyers with a mortgage preapproval letter. This is because a preapproval letter is a clear indication that you have purposed to purchase a home. In that regard, the property seller knows that they can earn money if they are accommodative during the property showing and negotiations. Overall, the mortgage preapproval letter is one crucial document when buying a home.
You do not have to borrow the entire amount indicated on the mortgage preapproval letter. You must factor the affordability aspect. The mortgage lender suggests that they can lend so much. Consider whether you can n you afford to repay that much without falling behind or defaulting repayments? Remember that if you default mortgage repayments, you risk foreclosure. To avoid such outcomes, make sure you are buying only what you can afford.
Calculate the total monthly income and the total monthly expenses. Remember to factor the financial obligations like insurance premiums and saving goals. The remainder is what you can afford as mortgage repayment monthly. When buying a home, ensure you stay within the budget.
4. Explore Different Mortgage Options
There are different mortgage options to finance new homes, St. George, Utah. Make sure you are going for an affordable mortgage, and you meet the eligibility requirements. There are different categories of mortgages. Here is an overview of the mortgage options to consider:
- The conventional mortgage
- Federal Housing Administration
- United States Department of Agriculture (USDA home loan)
- Veterans Affairs Home Loan
Therefore, when shopping for a mortgage, you may seek a mortgage broker’s assistance to understand the various home mortgage options.
5. Work With A Qualified Real Estate Agent
An experienced real estate agent helps you through the different stages of buying a home. Therefore, by engaging an experienced expert, you are assured of a smooth flow of the home buying process. A Realtor will walk you through the home searching process and shopping for a suitable home loan. Moreover, a qualified realtor understands how to avoid falling into the different pitfalls you encounter in buying a home.
6. Attend Open House
An essential aspect of your home search process is attending a home showing events (open house). During the home showing event, you meet other homebuyers and share different experiences. There is a lot you could learn from the other homebuyers. Ask the real estate agent to notify you of the upcoming home showing events.
The home buying process can get overwhelming if you do not involve an experienced realtor. Talk to a real estate agent near you to guide you through the home buying process.