Owning your first home is quintessentially the right of passage into adulthood. Whether it is owning your own piece of land or escaping your parent’s house, first-time homebuyers enjoy the sense of achievement after signing the final paperwork. Some dreams however turn into financial nightmares if precautions are not made in advance. The key is to be prepared and informed. Here are 5 tips to purchasing your first home.
1. Getting Approved for a Mortgage
When qualifying for a loan, one of the most important factors is a good credit score. Get a free credit score report to see where your credit score falls. Your credit history determines what loans you will qualify for and the interest rate you will pay. To maintain an excellent credit score do simple things like avoiding credit card debt, paying your bills on time, and checking your credit limits.
According to nerdwallet:
300-629: Bad credit
630-689: Average credit
690-719: Good credit
720 and up: Excellent credit
2. Find the Right Real Estate Agent
This is a crucial step in finding your first home. Not only do you need a reputable agent, but also someone who understands the local market. Without trust and an extensive background in the local market, you will not succeed in finding the best home at the best price. Research numerous realtors by using internet ratings such as realtor.com and trulia.com.
3. Save! Save! Save!
One of the biggest upsets for first-time home buyers is realizing they did not save enough money. According to Bank of America, the best down payment is 20% of the home’s purchase price. A higher down payment also means a lower interest rate. Saving every penny you can will add up, and help create a better future financially. Closing costs will not be cheap either; be sure to set aside an additional 1-2% of the purchase price.
4. Get a Home Inspection
It could possibly be a catastrophic mistake to avoid a home inspection. A tight budget could make you reluctant at first, but could save you in the long run if you invest in an inspection. Getting a home inspection will help determine costs that could arise in the future and how to prevent any further damage. Home inspections can detect safety issues like radon, carbon monoxide, and mold. Avoiding an inspection will only delay your problems not solve them.
5. Long-Term and Re-Sale
When looking to purchase a home you must not only see it for its original state but for its potential earnings as well. Look around the neighborhood and see if there are any selling points that would help improve the home’s re-sale. Look at your potential neighbors and the state their homes are in. There many be some issues you can overlook as the potential buyer, but when you are the seller will other buyers be willing to look past the surface too?
Looking for a home in Ocean City, NJ or the southern NJ shore?
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Posted by: Brittney Clark | Marketing Coordinator