So, you think you’re ready to end your time as a renter and buy your first home. In the long-term, it’s an excellent choice, but what do you need to know in order to begin the process?
Begin by taking a detailed look at your personal finances and checking your credit reports. Then it’s time figure out what your budget looks like and what type of down payment you can afford. Fortunately, there are FHA-backed loans with lower down payment requirements plus costs. You may qualify for even better terms if you are a veteran or serving member of the United States military.
Once you know your budget, we can help you understand where credit stands and can help you pre-qualify. Pre-qualifying marks a milestone in home buying because it shows realtors, lenders, and sellers that you’re serious and, in principle, you have the capacity to purchase a home. From this point, you’re beginning the real journey of becoming a home owner.
Getting the pre-qualified and understanding the home buying process can help make the buying process less stressful and more productive.
Understanding the Costs Involved
Owning your home means you make monthly loan payments which include payments toward principal, interest, property tax, and insurance. If you go FHA and make a small down payment, you’ll also pay mortgage insurance premium on the extended loan each month.
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Homeowner association (HOA) Fees
Other fees to be aware of are homeowner association (HOA) fees or condo fees. If you are buying into a community or building that has shared responsibilities you will likely pay HOA fees. HOA covers the cost of maintenance, some utilities, and the property management contract. An HOA fee is a given for condos, if you are purchasing a house, you should still budget a similar amount for the cost of maintenance and repairs and set it aside each month.
Get Ahead of The Game
If you can save for a larger down payment and improve your credit score you may qualify for lower interest rates on your mortgage and have lower monthly payments. Becoming a homeowner will not only free you of endless rent payments, but will help you build equity in a long term asset that can accumulate value over time and help build your credit as you go.