Becoming a first-time homeowner is an exciting but also potentially stressful step that many people consider a rite of passage. Endeavoring to purchase your first home requires planning and preparation, unless you have someone to guide you through the process, you may not know where to begin.
Our team of real estate agents in Barrie, help many of our first-time home buyers prepare for this exciting process, below are 5 steps that may help you along your journey to become a home owner as well.
Build a Budget
There are many different styles of homes and varying costs associated with each. Knowing how much you can afford before you start your search will help narrow down the possibilities. As you are building your budget, you must consider your total monthly expenses and not just your monthly mortgage payment. Consider items such as insurance, taxes, utilities, groceries and other payment commitments such as car and student loans.
Save for Your Down Payment
Before getting a mortgage for your new home, you will need to have enough funds in hand to cover a down payment. The down payment can fluctuate between 5-20% of the total home price, the specific amount will depend on the type of home you are purchasing, the total value, and your situation. To avoid any delay in your home purchase, you need to start saving for the down payment. If necessary, cut down or avoid some unnecessary expenses and be disciplined as you save.
Increase Your Credit Score
Your credit score plays a key role in determining the mortgage options that you will have access to. This is because most lenders will take the time to check out your credit score as an indicator on whether you can pay back your loan or not. With a higher credit score, you will likely get additional mortgage options at relatively lower interest rates.
Hopefully you don’t have any really negative hits to your credit score, but if you do, it can take months or even years to build your score back up. You can help increase your credit score by not applying for additional credit, paying your bills on time, and repaying all existing debts.
Select the Right Mortgage
There are a lot of mortgage options available, and the various options may even become overwhelming at times. Get support by speaking with friends and family about the subject, of partnering with a mortgage agent that represents multiple brands. We also suggest doing some research of your own to better understand your different options and products.
Get Pre-Approved
Getting pre-approved means that the lender will give you a letter that states the amount you will likely get as a mortgage. With the pre-approval, you can be confident that you can secure the financing needed to close the deal on your first home.
Once you have prepared to purchase your first home, remember there is no need to go out looking on your own. Partner with an experienced real estate agent to ensure you have the best available homes at your disposal. Your real estate agent won’t just show you available homes, they will explore all available listings to help you find your perfect home.
