First-Time Home Buyers Checklist
As spring kicks into high gear, so too does the housing market! Have you been thinking recently about buying your first home? If so, you may find yourself becoming a little overwhelmed at all the tasks ahead. This is completely normal and is a standard part of the process for most first-time prospective homeowners. But here’s a quick checklist of things to go through as you move forward:
Debt: Your credit score is going to play a huge role in whether or not you’re able to buy a house. Make sure all outstanding debts are paid and that your credit score is in OK condition. The better your credit score, the better your interest rate on a loan. But keep in mind, if your credit score is too low, you may not be granted a loan at all.
Savings: According to experts, you should have at least 20% of the house’s purchase price saved as a down payment. While it’s still possible to buy a house with less than 20% saved, there are way more advantages to being at 20% or above. One advantage is that you’ll likely avoid paying private mortgage insurance.
Budget: No matter how much money you currently have in your bank account, you’ll have to account for the long-term, month-to-month, and year-after-year expenses that come along with it. You’ll also have to take property taxes and your homeowners association dues into account as well. Experts recommend working the numbers backwards to make sure you’re completely covered to buy a home financially.
Loans: When it comes to loans, most homeowners go with a 30-year mortgage, but others sometimes go for a 15-year loan or somewhere in between. The standard train of thought is that the shorter your loan, the less interest you’ll ultimately have to pay over time. Make sure you crunch the numbers and do plenty of research before committing to anything.
Scout: Once you’ve figured out the financials and done all your prep work, now comes the fun part. Start scouting out the different areas and neighborhoods where you would be interested in living, and don’t forget to look up the tax rates as well. Get a feel for the different areas and visit some of the local attractions to give you a better sense of what living there would be like.