Tips for First-Time Home Buyers
Buying a home can be both exciting and overwhelming at the same time, especially if you’re a first-time home buyer.
Keep reading for tips to help make your home buying process go smoothly.
Check Your Credit
Your credit score is one of the most important factors in securing a home loan.
You should check your credit report for mistakes, collections accounts, or unpaid accounts. Ideally, as a first-time home buyer, you should have a good or excellent credit score.
Repairing damaged credit can take time, so begin the repair process at least six months prior to shopping for a loan.
Look at an FHA Loan
Typically, an FHA Loan is one of the easiest types of mortgage loans to qualify for. It allows first-time home buyers to purchase a home with a smaller down payment and a lower credit score.
Another advantage of an FHA Loan is that it’s considered an “assumable mortgage”. This means that if you decide to sell your home, the buyer can “assume” the loan that you have.
People who have low or poor credit, have a history of bankruptcy, or have been foreclosed upon may still qualify for an FHA Loan.
See if You Qualify for an FHA Loan Now
Consider Being a “Good Neighbor”
The U.S. Department of Housing and Urban Development (HUD), operates a program called “Good Neighbor Next Door.” If you are a law enforcement officer, firefighter, emergency medical technician, or teacher, this program may help you purchase a home.
HUD offers qualified purchasers a 50-percent discount off the list price of homes that are available.
You can check the HUD website to search for available properties in your local area. Some homes sell quickly, so you may want to watch the listings closely.
Know Your Rights as a Veteran
If you are a veteran or currently serve in the armed forces, you may qualify for special housing benefits.
Many veterans pass up significant savings because they aren’t aware of what the U.S. Department of Veterans Affairs now offers. In addition to securing a VA home loan, you may also qualify for other types of mortgage assistance, such as a grant that helps you build an adapted home.
Check Your Eligibility for Government Sponsored Home Loans
Focus on the Big Picture
Many first-time home buyers use the listing price of homes in their area as a starting point for their home search. Other factors must be considered such as interest, mortgage insurance, and taxes.
Using a mortgage calculator online will help you determine the full cost of a home, including homeowner’s insurance and property taxes.
You can also adjust the down payment and interest rate to see how small changes can make a big difference.