Spring is coming, and you know what that means— it’s home buying season!
The housing market can get a bit chaotic during springtime, making it an intimidating playground for homebuyers, especially for those hoping to buy their first house. This is because there are a plethora of factors you need to consider, and as home values keep soaring, the turmoil of bidding wars begin.
For this reason, if you’re a first-time homebuyer, financial advisors and lenders will help you on your journey in finding a home with the best deals that suit your budget. They’ll be able to guide you through the real estate marketplace and help you make bids on your dream home.
If you’re thinking of rolling up your sleeves and charging into the real estate battleground this homebuying season, keep reading. Here are some first-time homebuyer questions you need to ask yourself to help kickstart your homebuying journey.
1. What is My Credit Score?
Mortgage rates are at an all-time-low nowadays, but for you to lock in a desirable rate, you need to have a credit score of 740 or above. Your credit score is a critical factor that can determine your rate. When you have a higher credit score, the chances of getting a better rate is more favourable.
This is a better strategy than reducing your debt-to-income ratio or raising your down payment. So, start paying your debt and increase your credit score for better mortgage rates.
2. What are My Plans for the Future?
When you’re looking for a home, consider how long you plan on staying in that place. If you expect to live in that space for less than three or five years, best not to buy a home. This is because real estate commissions and mortgage closing fees can eat up your money when you sell the property.
3. Do I Have Enough Money for a Down Payment?
If you have at least 20 percent — which is around $60,000 — on a $300,000 home, you’ll be able to dodge private mortgage insurance or PMI. However, if you have less than 20 percent, you might have to pay for PMI.
Some loan programs allow you to make a small down payment for Federal Housing Administration loans but do not that these loan programs carry higher fees.
4. Can You Handle All Home Management Expenses, Insurance, and Property Taxes?
Just because you secured a home doesn’t mean big money expenses are out the window. In fact, more money concerns will start to roll in. You should know that getting a home is a huge financial commitment.
As a homeowner, you need to pay principal and interest and shell out money for insurance and property taxes. To top it all off, you need to consistently manage your home and do repairs and replacements when necessary.
5. Can You Wait?
Let’s now forget that we’re still in the middle of a pandemic. Because of this, the coronavirus housing market has a record-low inventory but incredibly high demand, which means the prices are soaring.
If you’re a first-time homebuyer during this time, it’s best to wait until the housing market is in a better position during this uncertain economic climate. You’ll be able to save loads and keep your budget, as well as save enough to fund your financial security.
The Bottom Line: Homebuying is a Huge Commitment, So Make Sure You’re All In
Buying your first home is a huge milestone. And for this reason, you want to ensure that you’re taking the right steps. With the help of reliable mortgage brokers, you’ll be able to keep your first-time home buyer finance in check and find better and effective ways to purchase your first home.
How Can FinanceCorp Help You?
Financing your home shouldn’t be a daunting task. Instead, it should be an exciting experience since you’re about to step into a new chapter of your life.
With the help of our expert mortgage brokers here at FinanceCorp, we’ll be able to match you with the financial needs that will help fund your present and future. Let us find the right loan for you. All of the Finance Managers at FinanceCorp are fully qualified, trained and experienced mortgage professionals who live and breathe finance. Speak to us today!