How To Buy Your First Home
March 18, 2021
Buying a home is the best investment an individual can make.
However, it’s easier said than done. It takes not just a lot of money to buy your first home, but also a lot of research, careful market analysis and a number of wise decisions to ensure that you have made the right move.
If you are planning to buy your first home, and wondering where to begin with, then this is a must-read post for you. By the end of it, you will have a clear idea of all the dos and don’ts you need to keep in mind when buying your first property.
So, let us begin.
1) Do Check Your Credit Score
One of the first and most important things you need to do when planning to buy a home is to check your credit score. This gives you an idea of the loan amount that you can avail of.
It is worth mentioning here, that having a poor credit score might lead to a lower value in the loan amount. In worst cases, it can even keep you from getting a loan.
Before you build your dream castle, it is recommended to choose reliable sources to verify your credit score, so that you can plan your future purchase.
2) Do Set A Budget
The second important thing you ought to do when planning to buy your first home is to use a mortgage calculator to set a budget. A lender can tell you how much loan you can get, based on your credit score and other similar factors. However, it is only you who can judge how much you can comfortably repay in the mortgage.
Therefore, setting a budget and planning your mortgage becomes crucial. Once you have this factor sorted out, you can refine your search and accordingly search for properties that fit within your budget.
3) Do Go Mortgage Shopping
Another important thing that you ought to do when going to buy your first home is to thoroughly research the mortgage options. You might be shocked to see that the difference is mortgage rates offered by different lenders.
In fact, it is always a smart idea to get loan estimates based on your credit score, the down payment you intend to make, and the type of property, you are interested in buying.
4) Do Read Your Mortgage Terms
Last but certainly not least thing you ought to do is read the terms of the mortgage agreement thoroughly. From its interest rate to adjustments and potential repayment plans, and the prepayment conditions.
Be sure to read the agreement carefully before agreeing to sign it. Read it thoroughly, and if you have any confusion make sure to get it cleared from any reliable resource.
1) Don’t Share Your Social Security Number
Not many people know this, but it can hurt your credit score quite badly if you put multiple enquiries for it within a short time frame.
Therefore, it is advisable only to share your details like Social Security Number when you are actively loan shopping. In fact, we recommend sharing it with lenders only
when you are interested in a deal because that’s when they will require your personal details to verify your credit score.
Instead of sharing it with every other lender that comes your way, be selective to ensure that you don’t end up hurting your credit score.
2) Don’t Sign Anything You Don’t Understand
There will be times when the lender or the real estate agent you are dealing with might ask you to sign documents, stating that it’s a mere formality. Don’t make the mistake of signing anything without prior knowledge.
As mentioned earlier, read every document thoroughly, ask questions if you don’t understand something mentioned in the document, and get all the answers.
You don’t want to end up getting stuck in a rut or paying a lot more for the home you are going to buy than you intended to.
3) Don’t Make Any Other Big Purchases
Making any big purchases, especially the ones that you intend to finance can lead to a change in your credit history and impact your credit score. What this could also do is jeopardize your loan approval, since your debt-to-income ratio will change.
Therefore, it is advisable to not make any big financial changes in your life right before you plan to buy your first home.
Avoid changing your job, moving money around, or buying something big – let it wait for a while before you buy your home.
There are a number of documented cases where people have ended up almost losing their homes because they were not careful enough when handling their finances just before the purchase.
4) Don’t Rush
Most important of all, always remember that buying a home is a big financial decision. You cannot afford to rush in making this decision.
Consider all your financial options calmly, be calculative in your approach so that you know how much you can afford, and what’s the repayment plan going to be for you.
It is only after carefully analyzing all the factors that you must think of making this big investment. Otherwise, you might end up making the biggest mistake of your life, and repenting on it forever.
Like I said at the beginning of this post, buying your first home is a big decision. It is important to learn the tricks of the trade, and perform thorough research before you
settle down to one decision. If you’d like to trust a professional, you can connect with a Negotiator Recognized Partner (NRP) to get the best help you need in buying your first home.
Whatever you may choose to do, just remember to do thorough research before you make your decision. After all, it’s one of the biggest decisions in a person’s life.
All the best!