5 Things You Need to Know Before Buying Your First Home
You learn a lot of things in school — the circumference of the sun, how to find x, when to use the word “whom” — but one thing that’s rarely (if ever) taught is the knowledge you need to purchase a home.
The home buying process can appear to be riddled with unanswered questions, conflicting information and general confusion at every turn. But with these 5 simple tips, you can become a home buying expert.
Tip #1: Watch that Credit Score
Your credit score is a concept you may not have heard many practical details about in school, but it’s one of the most important numbers for you to know. Banks see your credit score as a three-digit indicator of how likely you are to repay debt.
Your score will typically fall somewhere on a scale from 300-850. The closer to 850 your score is, the easier it will be for you to get approved for a loan, something you’ll need in order to afford your home.
Tip #2: Pre-Approval is Preferred
You might be able to guess what your house budget is based on your finances and (as we mentioned above) your credit score. But, especially when purchasing your first home, it’s wise to speak with a lender beforehand.
It’s important to find a lender that you trust, with years of experience working with people like you. Reputable lenders like TRI Pointe Connect are always looking to put collaboration first, which can have a big payoff in the long run. Through this pre-approval process, you can work together to nail down an exact number. This way, you’ll know exactly what to expect.
In order to get an accurate number, be prepared to explain any debts or assets you may have to your lender.
Tip #3: Think Ahead
This doesn’t just mean making sure you’re prepared for your home tour on Saturday. When buying a new home, it’s important to consider not just the life you live today but the one you’ll lead tomorrow.
Buying a new home is a huge next step, so it’s crucial to take stock of what your future may hold.
What do your family and lifestyle look like 5 years from now? 10? 20? Regardless of the situation, you’ll want to find a home that lasts and, ideally, one that can grow with you.
Tip #4: Avoid a Downpayment Dilemma
A down payment is the cash you spend up front to secure your home loan. Putting down that amount of money can be intimidating, but unlike a rent payment, this money doesn’t just disappear into someone else’s pocket, it is actually put toward the overall cost of your new home.
Most lenders recommend a 20% down payment. This steeply reduces the cost of your mortgage month-to-month and can get you a better loan overall, but there are plenty of down payment options available for first-time buyers who don’t want to put down that much up front.
Talking to people you know and trust, financial experts with whom you have a strong relationship, and your lender can give you the guidance you need to create a down payment program that works best for you.
Tip #5: Count the Cash
Look beyond the sticker price of your new home. If you’re buying an old, lived-in house, there may be secret costs to its upkeep.
Renovating a less-than-perfect building can seem like a fun new challenge, but putting in all that work for repairs and home improvement projects comes at great personal cost — in the form of time, energy and finances.
Buying new construction means that you won’t find any secret costs hiding within your walls, so trusting trained professionals pays off by saving you from the hassle and ensuring that your home will be exactly what you’re looking for, right off the bat. Plus, you get new home warranty benefits to protect you from any unwelcome surprises.
When you keep these tips in mind, you’re on the right track to finding the perfect home for you. Check out our Winchester communities and get ready to take your next step!