Everything You Need to Know About Buying Your First Home
Buying a home is a big deal, especially if you are first-time buyers. Entering into the property market has become increasingly difficult, made even more difficult by how expensive city living has become. If you work in the city, finding a home in your budget can feel like a nightmare. The more you prepare, however, the better your experience will be. You never want to rush into a decision as big as buying a new home, which is why you first need to these key bits of information:
Build Up Your Credit Score
The first step to making a big investment like buying a home is to build up your credit score. The best and really the only viable way to do this is with a credit card. Choose one to start with and make all your payments on that card, and remember to be very prompt with your repayments. Other ways that you can build up your credit score include paying off a loan for a car or other moderate purchase. While you are building up and improving your credit score, you can start saving for the down payment.
Start Saving Now
Most loans will require you to put up at least 5% of the total price of the property, though if you wanted the best interest rates, you will need to save up 20% of the down payment. When homes are hundreds of thousands of dollars, this means your down payment will be quite substantial. The earlier you start saving, the better. Saving for your mortgage will take years, but saving the 20% will take the pressure off later in life. When kids are on the horizon, you will want as much money available to take care of them.
The Loan Approval Process
Once you have built up your credit score and have a substantial enough down payment to qualify, it is time to visit Apply and Buy so that you can be matched with lenders who will compete to offer you the best rates. Being pre-approved is an essential component to buying a home, as it gives you a clearer idea of what your budget is and how well you can afford the repayments in the future.
What to Look Out for in a Home
Now that you have your pre-approved loan, it’s time to choose your property. Look for the potential in a building over the reality. You can always make improvements, but if the space is too small for the size of family you are hoping to have, then it is best to look elsewhere. The longer you stay in your property, the more you can gain from it. Paying it all off will give you the most returns and the highest appreciation value, especially if you make improvements to it later on. To get the best deal, choose a neighborhood that is expected to gentrify in the future. Keep an ear out for any development deals nearby, as these are great projects that will increase the value of your home significantly.
Buying a house for the first time is terrifying, but the more you prepare in advance, the better off you will be. Build your credit and start to save as soon as possible so that you have the best options for your new home.