The idea of buying a home can be very scary. There is no real right or wrong time to buy a home. If the desire, resources, and finances are there, it may be the time to start looking for your next home. If you have the right amount of money saved up, don’t hesitate to get pre-approved with a mortgage lender to start the home buying process!
Below is a list of seven tips for people considering buying a home:
Take Advantage of Low Rates
Taking advantage of low rates means lower monthly payments. Financing a home is a considerable expense as it is. Find the best lender for you with the lowest interest rates available!
Buying Existing or Building New
Anytime someone considers buying their first home they want to reach for the stars and get the home of their dreams. This means they will hire a home builder and zero in on breaking ground sooner rather than later. Choosing this approach is ideal considering how few already built homes are on the market at any given time. Depending on the particular area, building a new home might be a person’s only shot at home ownership in the location they desire most!
Considering First Time Homeowner Incentives
First time homeowner programs differ from state to state. Aspiring homeowners should consult with their lender to determine if they’re eligible for one and which one they will choose. A robust first time homeowner program might be the difference between someone buying a home and deciding to wait. These programs have expiration dates, so if one seems interesting, it’s a good idea to hop on it before it goes away.
Navigating a Seller’s Market
At this moment, we’re in the middle of a seller’s market. Each house receives a stack of offers, driving up the price of each property in the process. The competition is fierce, making it so people could lose out on the home of their dreams by mere moments. Consider how much you are willing to pay on a home before you even begin the process. Start looking at homes on the lower end of your budget, that way if you need to bid a little higher to get the house of your dreams, you have the wiggle room for it!
Consider a 15 Year Fixed Rate Loan
The interest on your loan is a huge part of your monthly payment, and adds up very quickly over time. Instead of the conventional thirty year loan, consider a fifteen year mortgage. Although it may cost you more each month, a much larger part of the money you are putting in goes to paying down your debt. As a result, you will pay off your mortgage in half the time and save yourself tens of thousands of dollars that would’ve gone to interest over the years.
When searching for a home to purchase, try to find one that keeps your monthly mortgage payment to no more than 25% of your monthly take home pay. Keeping your payment below this amount will help you save up and pay cash for other purchases like furniture, cars, college, renovations, etc. As a result, once again; you will pay far less in interest.