Preparing to purchase a home is a big adventure, and let’s not forget, a big investment! It can be scary taking the plunge into home buying, however extremely rewarding. When preparing to buy your first home, there is a lot to consider. As you get started, it is helpful to know the ins and outs of home buying. There are also many advantages of being a first time homebuyer. Here are three top tips from your Westminster real estate agent.
Save, Save, Save
Prior to purchasing a home, it is best to save as much as you can. First, you will need to cover your down payment but there are other expenses as well like a home inspection or appraisal before you purchase. Also, unless you can negotiate for the seller of the home to cover closing costs, you may have to pay these closing costs as well. Closing costs can be up to five percent of the cost of the home and cover a wide variety of fees from the generation of the loan and title fees to an escrow deposit. Use the closing cost calculator
to find out what additional funds you may need.
Look into FHA Loans
If you are a first time homebuyer, or have not purchased a home in several years, you can qualify for a Federal Housing Loan (FHA). FHA loans allow people to purchase a home with a lower down payment, with some rates being as low as 3.5 percent. When it comes to your percentage. Your interest rate all depends on your financial situation. The lender will review your debt to income ratio and your credit score to determine what you can qualify for. In addition, FHA loans help homebuyers to cover closing costs and can also help you make improvements and adjustments to the quality of your new home. One of the ways you can do this is through HUD’s 203K Rehab Mortgage Insurance
Be Cautious with Credit
As you prepare to purchase a home, you will want to make sure your debt-to-income ratio is low. This ratio compares the money you make with the amount of debt you have. Ideally, you will want to keep your rate under 40 percent. Once you go over that percentage, lenders will want to limit the amount of money you can borrow. Next, before buying a home, do not make any other large purchases. You will want to keep a low profile until you purchase your home because your lender will be monitoring. You can also keep an eye on your debt-to-income ratio and financial situation by using a free credit monitoring service.
When looking for your first home, you can count on the experts at Giving Back Group to help. We are your go-to Westminster realtors and can help you determine your budget and anything along the way. In addition, we donate 20 percent of our commission to a charity or nonprofit of your choice in your name. Learn more tips for saving for a down payment
and contact us at 303-881-4881 to get started.