Purchasing a home is exciting for everyone. However, for those who are first-time home buyers and looking for Lake Murray Waterfront Homes, the process is a bit intimidating at first. It is easy to get overwhelmed and confused along the way.
While this is true, there are some tips designed to help every home buyer make smart decisions and avoid some of the most common mistakes. Keep reading to learn what those tips are.
Pay Off Debt First
It is expensive to own a home. Even if the monthly mortgage payment is close to the person’s current rental fee, there are other expenses to consider. Owning a home means having to cover all repairs, upkeep, and maintenance, costs. Be sure to pay down debt and build an emergency fund before moving forward with purchasing a home.
Determine a Realistic Price
Before forming an emotional attachment to a beautiful house, create a workable budget. Potential homebuyers need to be honest with themselves regarding how much house they can realistically afford. There should be room left in the buyer’s budget for other things. It is a good idea to ensure all monthly housing costs do not exceed 25% of the buyer’s total take-home pay per month.
Save the Down Payment
If saving up to pay cash for the entire cost of a home isn’t realistic, it is essential to save enough to make a down payment. For most people, this should be a minimum of 20%. By doing this, the home buyer can avoid having to purchase PMI private mortgage insurance that protects the mortgage company if the buyer is unable to make payments and the house winds up in foreclosure. Typically, PMI costs around one percent of the total loan amount, and this one percent is charged annually.
Save for the Closing Costs
Along with the down payment, buyers may also be responsible for covering the closing costs. Those who are first-time homebuyers may wonder how much this cost. Usually, closing costs will be three to four percent of the total purchase price of the home, but that can vary depending on the circumstances. Usually, this amount must be paid before the transaction is considered complete.
Seek Loan Preapproval
After enough money has been saved to cover the 20% down payment and closing costs, it is time to speak to a mortgage lender. Getting pre-qualified for a loan before searching for a home will make the process much easier. With pre-approval, a buyer is letting sellers know they are serious about the purchase. This is a great way for first-time buyers to get the house they really want, even in a competitive market.
Buying a house is exciting. While this is true, there are also things that first-time buyers need to keep in mind to ensure the process goes smoothly. Keep the information above top-of-mind during the buying process to avoid issues and enjoy all that homeownership has to offer. Being informed and knowing what to expect is the best way to have confidence in the home buying process.