Buying your first home is daunting: finding the right house, figuring out an affordable down payment, applying for mortgages and home insurance. With all of these intimidating factors, many people choose to put it off and go with something simpler like renting an apartment.
What Is Renting Costing You?
While renting is typically easier than buying a home, it does cost you. Each month’s payment goes to your landlord, and never builds any home equity for you. You’ll never own that apartment no matter how much rent you pay.
When you’re paying off a mortgage, you’re both building positive credit and working your way toward owning that home. You can sell it once you move, and you can even profit if your home value rises above what you paid into it.
Need further convincing? Well, it turns out that many renters pay more monthly than what a mortgage would cost them! You could be saving money each month AND own your home to sell later!
Things to Know as a First-Time Homebuyer
You don’t have to make the journey of buying your first home alone. It’s why we have mortgage brokers in our offices. Come talk with us about your homeownership goals and we can help you understand the correct actions to take to get there. There’s no shame in asking for help, especially with the biggest purchase of your life.
Eric Barnette of our mortgage lending department has these tips for first-time homebuyers:
We Can Work With No Credit
Another reason younger people put off buying a home is that they don’t believe they have enough credit. While having a strong credit history will help your mortgage application, it is not completely necessary to buy a home. Our lenders can work with no credit, but bad credit will be harder to overcome. Raise your credit score with these tips!
Get Your Closing Costs on Deposit Early
Remember that any lending department is going to look at your assets when considering your mortgage terms. They also consider how long those assets have been sitting in your account. Best practice is to make sure any down payment or closing costs have been in your account for at least 60 days. You may have that cash on hand, but a lender will feel more confident in your loan if the money is more secure.
No Big Changes or Purchases
While you’re going through the mortgage process, there are certain activities you want to avoid or else they could hurt your chances. This is not the time to be changing your employment. If you know you’re heading to a new career, perhaps wait to begin your mortgage application. We check employment right before closing.
Another thing to avoid is taking on any new lines of credit or making large purchases. Even if you need new furniture for your new home, buy those things AFTER you close! Taking on any new debt during the mortgage process may cause you to be denied.
Even More Information for Home Buyers
There is a lot to understand about home buying, and the better informed you are the better decisions you can make. We have a good deal of educational content for you to learn from, so take some time to prepare yourself as a first-time homebuyer.
The Benefits of Getting Pre-Approval
Look Out for These 7 Hidden Costs