At some point of every person’s life, their apartment life that was once perfect hits a breaking point. One day, their apartment seems ten times smaller from when they first bought it, the plumbing always seems to need assistance, and the neighbors are constantly in the way.
So, how do people typically solve these problems? This sometimes signals they are ready to upgrade and start investing in real estate. Where they will have much more room, the plumbing will be controlled under their own jurisdiction and the neighbors will be further than a door away. As a first-time home buyer, there are many more things to consider besides what you want. You will need to consider what owning a home needs.
Homes will need a homeowner that is accountable. They need to understand they are responsible for financing the home, in charge for any damages or items that need to be repaired and preserving its overall value. The bottom line — it’s a lot more work than most people think. Before you start browsing homes for sale, first-time home buyers will need to consider these top 4 factors.
Type Of Loan
As a first-time home buyer, it is safe to assume they will need some type of financial assistance to cover the mortgage. Because not many people have hundreds and thousands of dollars lying around, they look to finance a loan. And one of the best things about mortgage loans is that there is a variety to choose from. Each offer different benefits and can be designed to suit each borrower’s financial situation.
All loans have different requirements that need be met in order to be eligible. For example, an FHA loan requires homeowners to have a credit score between 500-579 for a maximum loan-to-value (LTV) of 90 percent with a minimum down payment of 10 percent; a USDA loan requires home buyers to purchase a home that is located in a rural suburban area; and a VA loan can be financed to those only who have served over 90 days during wartime.
Mortgage loans are very appealing to those who are looking to buy a home. They help homeowners finance their dream home in monthly payments that work for them. The type of loan borrowers choose will determine how they should manage their finances. Because it is an important decision to make, homeowners should be educated on the types of loans available and how each of them work. The more knowledgeable you are, the more confident you will be on choosing the right loan.
In addition to an acceptable credit score, the down payment amount also needs to met in order to be considered eligible for a specific loan. The down payment is a large sum of money that is needed upfront when purchasing a home.
According to surveys, homeowners’ biggest challenge was saving up for the down payment. So, if you are in the market to buy a home, consider how much money you have saved up. The more money you put down, the better the loan.
Mortgage experts advise homeowners to put down at least 20 percent. Mainly because the more homeowners put down, the lower monthly mortgage payments will be. However, there are other loans available that require a lower down payment. It all depends on the location of the home, your finances and credit score.
Fortunately, there are local programs and grants that are available to homeowners that need a little extra help expensing the down payment. If you are interested, look at your city’s website to see what programs are offered.
Before you walk into any lender’s office, you will need to do some additional research. Mortgage lenders are responsible of approving applicants for loans. They will review the borrower’s finances, run their credit score and evaluate their overall situation. Based on this information, they will be able to determine what kind of loan they can offer.
However, borrowers will need to be selective with which lender they decide to work with. Lenders will be working closely with your finances, and processing the loan within a timely manner to help you buy a foreclosure or regular property. Borrowers want to work with a lender that communicates effectively, has a wide range of loan options to choose from and has a satisfactory reputation.
As a borrower, you will need to do extensive research on lenders in your area in order to choose the right company. The lender you choose to work with needs to meet all of your expectations so you will have a positive home buying experience. If you are having trouble deciding on a lender, you can ask your realtor for suggestions, or family and friends for recommendations.
Even if you have watched every episode on HGTV, you won’t want to buy your first home without some professional help. That is where a realtor will come in handy. They are experienced experts that know how the home buying process works frontwards and backwards.
They can answer any of your questions regarding attorney fees, closing day logistics, or anything in between. Realtors are extremely valuable throughout this process, especially for first-time home buyers. They can provide guidance and give buyers updates on what stage of the process they are in.
Because realtors are heavily relied on, first-time home buyers will need to carefully choose the right realtor. Realtors understand their client’s needs, from both a personal and financial standpoint. Their goal is to find a home that satisfies their client’s in every way possible. Which is why home buyers need to choose a realtor that understands their needs.