6-Steps To Buying A House As A First-time Buyer
Buying your first-ever house is a fantastic life achievement. It is also one of the most exciting things you will do in this lifetime. Sometimes, this excitement can cloud your vision, causing you to suddenly forget how to proceed with the process. If you find yourself in this situation, not knowing how to move forward, do not worry because this article is the only guide you need.
Here are the essential steps to buying a house as a first-time buyer.
Step 1: Know Your Credit Score
How much you can borrow and the interest rate you need to pay depends on your credit score. Before you apply for a loan, ensure that your credit score is high. That way, you can get a favourable loan amount, end up with a friendly interest rate, and possibly lower the down payment you have to make. Knowing your current credit score will also inform your next steps.
However, If you lack a credit history, you need to build one first. If you have credit card debts yet to be paid, you need to settle them as well. You can also use a car or student loan that you have successfully paid off (or are in the process of repaying) to provide you with a good credit history.
Step 2: Identify Your Budget
Once you know your credit score, you need to compute how much you can afford to borrow and pay every month. Set a budget based on your current monthly income and expenses that you can work with.
You must also understand that the monthly mortgage payment is just one of the costs associated with owning a new home. You also need to allot a budget for insurance, maintenance costs, property taxes, and utilities.
Step 3: Determine How Much Your Down Payment Is
A decent rate for the down payment is 20 per cent of the total cost of your home purchase. However, other options, such as 3.5 per cent, also exist. Your lender should explain to you your options based on your financial situation and approved loan type. Speak to your mortgage advisor about how large a down payment you can afford.
Step 4: Find a Mortgage Lender
When applying for a mortgage, you need to find a lender first. Look online for reliable lenders with easy and step-by-step procedures on finding and securing the best mortgage for you. They should consider the type of home you want to buy, your credit score, and your intended timeframe.
Step 5: Have Your Mortgage Pre-Approved
Some might wait until after they find their dream home before applying for a mortgage, but that is a mistake. Mortgage approval takes time, and if you apply for one only after finding a home to purchase, you might lose your chance of getting it.
A better way to do it is to get mortgage pre-approval first. This step will also give you an idea of how much you can afford, the interest you will have to pay, and the types of loan programs you are qualified to take advantage of. With a pre-approved loan, you can make an offer quickly and confidently.
Step 6: Find the Right House
Here is the final and most exciting step: finding the home that fits your budget and meets your needs. You can look at real estate websites that will help you find listing brokers. Be wary when choosing a real estate agent to work with. As a first time buyer, make sure that they have your best interests in mind. Find someone who will teach and guide you throughout the buying process.
We’re Here To Make It Easy
Finding a home will require a lot of introspection and careful decision-making, but all these steps to buying a house will lead you to the home of your dreams. If in doubt, do not hesitate to seek help from people who can assist you.
Are you looking for your dream house in Byron Bay? At Balfour Homes, we take the stress out of buying and building new homes. We are here to make the process of purchasing a home less daunting and can walk you through all the steps to buying your house. Contact us today to learn how we can help.