There is nothing more fulfilling than finally owning your own home. It’s like a rite of passage into “adulting!” But it can also be a little overwhelming, and let’s face it, you weren’t prepared for this by your high school economics class. We’ve put together a collection of tips meant to prepare and guide you during this new adventure. These tips will help you successfully navigate the process without losing your way.
Save Early, Save Big
Some of the more major expenses involved in purchasing your first new home can be surprising and unsettling if you are not prepared. Save now for these three larger expenses:
- Down Payment—Expect this to be between 3% and 20% of the cost of the home. You want to aim for the higher percentage. Trust us you will be glad you did later in life.
- Closing Costs—Expect to pay between 2% and 3% of the loan amount. I know what you’re thinking, “Can’t I just roll this into the loan?” But if you are well prepared for this expense and can keep it separate, you will be glad you did.
- Move-in Expenses—Be sure you are prepared if the appliances are not included. This can be a huge expense you are not ready for if you do not plan ahead. Of course, you will want some new furniture to go with your nice new home, too.
Good Credit Goes a Long Way
Don’t wait until you are already shopping around for property to make sure your credit is stable and in good shape. This number can wreak havoc on your dreams and set you up for a long wait to finally get your own set of keys. Here are some ways to stay on top of things well in advance:
- Get Your Score from All 3 Credit Bureaus—You can request copies of your reports from the three major reporting bureaus: Experian, Equifax, and Trans Union. Be sure you get all three, each one may have just a little something different. Verify the information is correct on each report.
- Pay Bills on Time—It seems obvious, but just falling behind a little can affect your hopes of home ownership. Now is not the time to hold off on paying that bill just so you can buy another game or shiny new shoes.
- Keep Current Cards Open—It may seem like a great thing to close a credit account once you’ve paid it off, thinking this will keep you out of trouble. But, closing that account will change the amount shown on your reports as “available spending” and not in a good way. Better to keep a fully paid line open and show you have more spending power.
Do Your Homework
I know, you thought those days were behind you. I mean you are an adult now, right? But I am talking about researching and checking out your chances for some assistance. Help is on the way! Be sure to look for these first-time buyer assistance programs:
- Good Neighbor Next Door—If you are in law enforcement, a teacher, a firefighter, or an emergency medical technician, you can qualify for significant discounts to your mortgage.
- Fannie Mae—This will help if you have low- or moderate-income and can’t inflate that down payment.
- Freddie Mac—This program also helps low- or moderate-income purchasers keep the down payment low.
Keep in mind though, some lenders may not work with these types of programs, so Do Your Homework. Buying your first home is a complex process and comes with many bumps in the road along the way. Planning ahead and plotting your next move carefully can lead to good financial choices and a long-term, fulfilling dream come true.
Call RE/MAX of Hot Springs Village Today: 501-922-3777.
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Hot Springs Village Real Estate