For the first time home buyer, the entire process of getting a house can seem daunting. In an effort to ease the stress, I have assembled some tips focused on two main areas; the down payment and looking for a property. With these tips, first time home buyers will be armed with better information to make a solid decision.
Down Payment Guidelines
There are a few things to consider for the down payment of a home.
- Sooner you start, the better off you will be – Whether you are planning to pay 3.5% down on an FHA loan or 20% down on a jumbo loan, the sooner you can begin saving money that will be devoted only to the down payment, the better off you will be. One simple idea is to have a certain amount directly deposited from each paycheck so that you don’t miss it.
- Ask lender about down payment programs – Certain states, along with specific areas within those states, will offer assistance programs to help with the down payment. Some programs only help with the down payment while others will help with the down payment and closing costs. Each program has its own perks, so it is best to talk to your mortgage lender to discover what programs are available and which ones will work with your particular situation.
- Compare different mortgage loans – Some loans, like a VA home loan or a USDA home loan, will allow buyers to purchase a home with a zero down payment. This allows buyers to use their savings to pay for the closing costs and moving expenses and hopefully have a bit left over. Other programs, like the FHA or Fannie May HomeReady loan, allow for a smaller down payment under 5% to buy a home. Paying only 5% down compared to 10% or even 20% is a major difference on a typical home price of $200,000. Once again, this is where a mortgage loan officer can provide more detailed information about the various mortgage loan options that fit your needs.
These tips should help you to determine which loan is right for you and an approximate amount you will need for a down payment.
Shopping For A Home
There are lots of reasons why people wish to buy a home. Regardless of age, location or income levels, there are some basics that apply to all buyers.
- Get an Agent That works for YOU – Real estate agents can work for the seller of a home, or the buyer, or both. It is very wise to work with an agent that is dedicated to helping you find a home. This person will have your interests at heart and be on the lookout for any pitfalls of particular homes.
- Make sure to buy a home that allows for change – A whole article could be written about choosing the right sized home. Some people are young and working on growing their family. Other people are married with kids and may not EXPECT to have more kids. Regardless of your situation, get a home that has a bit more room than you need right now in case something changes in the near future.
- Do Not purchase over your budget – Lots of people have entered into a mortgage agreement with the idea that they would work a few extra hours, or give up a few non-essentials, in order to afford a home that was slightly higher than their budget. This is a terrible idea. One bad accident, or downsizing at work, could change your world and prevent you from affording that high mortgage payment. It is better to get something closer to the middle of your budget and live comfortably with the payment rather than living stressed out over the payment.
Final Thoughts On Tips For First Time Home Buyers
As evidenced by the info above, it is obvious that buying a home should involve the expertise of a good buyer’s agent as well as a seasoned loan officer. With the input of these professionals and the tips outlined earlier, you should be able to determine which mortgage is right for you to determine a down payment and what to look for in your next home.
About the author: This article on “6 Crucial Tips For First Time Home Buyers” was written by Luke Skar of www.MadisonMortgageGuys.com. As the Social Media Strategist, his role is to provide original content for all of his social media profiles as well as generating new leads from his website.
www.MadisonMortgageGuys.com provides award winning customer service to clients who need to purchase a home or refinance an existing mortgage. Our branch currently serves Wisconsin, Illinois, Minnesota and Florida. On our website you will find state specific mortgage program information for all states such as information on FHA Loans in Illinois.
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