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If you think there’s lots to do when buying your first home then… you’re right. But if you follow these tips you’ll be better prepared for what’s to come. These can save you from spending more than necessary and taking longer than you wanted. 

In this post we give you things to do and think about before you…

  • Shop for your home
  • Apply for your mortgage
  • Buy that new home

How Much House Can I Buy? 

First, figure out how much you can afford to spend on your new home. What’s in your price range? This will most likely come down to: 

  • Income
  • Savings 
  • Current credit history or score
  • Any outstanding debt you already carry and of course… 
  • Location, location, location!  

How Large of a Down Payment Can I Afford?

If you’re going for a mortgage, talk with lenders to see how much you will need for a down payment. If you’re a first-time homebuyer you may find a very advantageous down payment rate… as low as 3%. This rate can differ from state to state so check it out early. 

The size of the down payment could make the difference between being able to buy that house or it being out of reach. Here’s where your savings come in. For example if you’re looking at a home that costs $400,000 then your down payment at 3% could be $12,000. Do you have that much savings?

Are There Additional Costs When Buying a Home? 

You bet! Check with your estate agent for a list of costs you would incur when closing or buying the house. You don’t want to be surprised with extra costs piling up. Extra costs could include:

  • Surveys or inspections for the house
  • Estate agent’s fees (sometimes this is negotiable and it never hurts to ask for a reduction)
  • Legal fees for the closing (shop around because there can be big differences in what law firms charge for your closing)
  • Taxes on the Purchase
  • Home improvements or repair costs (make sure you hold some money back to cover any home repairs you’ll need to make right away)
  • Moving Costs
  • Homeowners Insurance
  • Neighborhood Fees
  • Local Taxes on Your new property

I’ve Been Turned Down for a New Homebuyer Mortgage, What Can I Do?

If you go through the pre-approval process for a mortgage and get turned down it’s often due to having a poor credit score. Or you could get approved but find that the interest rate the mortgage companies are offering is higher than the norm. This is also due to a poor credit score. 

If this is the case then there are things you can do right now to improve your credit score. First of all, learn what your score is. Check your credit score for free with Experian.

Once you get your credit record and know your score, study it. Make sure that everything is correct. It’s always possible that an error has been made on your credit record that is pulling down your score. If you find that’s the case then get that corrected as soon as possible. 

You can also pay off your credit card bills right away and get rid of any extra cards that you don’t use. In addition, make sure you’re registered to vote. That helps for verification. Doing these things can lower your score and help you get approved. 

What Mortgage is Right For Me?

Talk with lenders and explore your options. Ask about conventional mortgages vs FHA loans. If you live rurally you may qualify for a USDA loan and if you are in the military a VA Loan may be an option. USDA loans and VA Loans do not require a down payment. 

How Long Should My Mortgage Be For?

Many buyers choose a 30-year mortgage with a fixed rate meaning the interest rate stays the same. If you opted for a 15-year loan then you’d most likely have a lower interest rate than a 30 year one but with bigger monthly payments.

If you are a true first-time homebuyer then you have an advantage in many states so make sure to ask. You may get a better interest rate and some help on your down payment as well as your closing costs as well as tax credits. That’s pretty sweet!

Can I Shop Around For New Homebuyer Mortgage Rates and Fees?

Yes! It’s just plain smart to check out the competition and see what mortgages are on offer. Use a mortgage comparison site that can help find you the interest rate, cost and possible origination fee that you’re looking for. 

If you have extra cash on hand you can buy down your interest rate with lender discount points.  This pays off if you have the extra money and have plans to be in that home for a long stay. 

Will a Lender’s Pre Approval Letter Help With My Purchase?

A Mortgage Pre Approval letter from a lender could definitely help you with your purchase because it shows that you know what you’re doing and you’re a serious buyer that won’t waste the time of the estate agent and seller. Plus, it confirms that you can afford the house as the lenders will examine your credit score, as well as confirming how much you make, your assets and your current debt. This could help you beat out other buyers who haven’t taken the time to get pre approved.

Should I Shop Around For Estate Agents Too? 

Not all agents are created equally. So, YES, shop around for your real estate agent. Take recommendations for estate agents from family and friends. Find ones that specialize in the area where you’d like to live. Get to know the good ones so you get a heads up on new listings. And, ask if they have experience selling to new homebuyers (if you are one).

Should I Make a Home Buying Budget? 

A budget is an excellent idea so you have a firm idea of what you can afford! It’s all too easy for an estate agent to show you houses above your budget to get you excited about something you wouldn’t be able to get approval to buy due to your income, debt or credit score. 

If you know what you can comfortably afford then just say ‘No’ to ones you can’t buy! That is unless the house has lingered on the market and the agent thinks you could get it at a price that fits. Then have a look and see what you think.

If I’m Shown a House, Am I Obligated to Work With That Agent?

If you are shown a house by a particular agent and you decide to buy that house then you must buy through that agent. But, that’s the beauty of the online websites and videos that are so prevalent. You can look at lots of houses without committing to an agent. Start familiarizing yourself with floor plans and square footages plus layouts so you can get a better idea of what you may like so you can make an educated choice.

Should I Pay for Home Inspections? 

Depending on the age of the home, inspections are a must! While they seem expensive upfront they could save your thousands or tens of thousands of dollars. Depending on issues that are uncovered you may decide that the house would be too expensive going forward and you could ask the seller to make the repairs or ask to be released from your purchase contact. 

If you’re buying a brand new build and it is under guarantee then inspections shouldn’t be necessary. But, if there are local radon issues, then you may want to request a radon test just in case.

Bottom Line:

You can save time and money by doing your pre-viewing and pre-purchase homework. Educating yourself about what you can afford as well as what you want/need in your new home can save a lot of time.  


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