Financial Tips for First Time Homebuyers
Buying your first home is certainly a big deal and making sure that you're 100% ready to commit is an integral first step. Securing dependable income and a rainy day savings account that would cover the cost of at least 3 months of expenses are a few ways to start the process. Might there be any large expenses looming on the horizon that could interfere with your ability to make mortgage payments? Thinking a few steps ahead will better prepare you to buy your first home. We’ve got a few more tips to help get you started, so read on.
Start Saving for that Down Payment
Set aside a fixed amount from each paycheck—treat it like a bill and don’t skip “payments”. Cut out frivolous expenses like that daily coffee run or take-out dinners. Scan your weekly expenses and see where you might be able to scale back. Transferring the cash you would have spent on such things into your savings will help fatten up that account in no time.
Cut Out High-Interest Cards
Paying off or transferring high-interest credit cards to those with better rates will free up a few extra bucks each month. Call your credit card company and ask if they have any offers that might provide a better rate. Definitely keep a few credit cards active—closing cards actually lowers your score. You have the power to shop around, so don’t hesitate to contact other institutions and see where you’ll fare best.
Monitor Your Credit Reports
Get copies of your credit reports from all three credit bureaus, namely: TransUnion, Experian, and Equifax. Make sure that your information is current and correct. Overlooking mistakes on the reports could hurt your score, and affect the mortgage rates for which you qualify.
Shop Within Reason
Stay mindful of what your budget does and doesn’t allow for when shopping for a home. While that outdoor kitchen and pool house might be nice upgrades, are they options that are truly within your spending range? Does the property have monthly fees, such as HOA? Other costs like insurance and taxes will also arise when you’re searching for that special property and they will vary from home to home. Work with your mortgage lender and realtor to set realistic goals. And keep your chin up—the right home will come your way.
Save for Closing Costs
Mortgages involve closing costs that can range from 2% to 5% of the mortgage loan amount; this figure includes insurance, property taxes, and more. Typically, you’ll want to set aside your closing costs and pay them all in one shot. This is a good way to avoid additional interest, allowing you to squirrel that money away for a new television or unexpected home repair.
Don’t Forget Move-in Expenses
Set aside enough money to cover your moving costs, first month’s expenses, and basic home repairs, at the very minimum. Of course, furniture and home decor/upgrades have a way of sneaking in there. Try shopping around ahead of time, so that you aren’t impulse-buying and clicking “add to cart” during that first month of homeownership!
Are you thinking of buying a home in Idaho or have questions on the homebuying process? Check out these First Time Homebuyer Resources from Guild Mortgage or give us a call any time at (208) 901-3540.
If you’re already ready to start looking for homes in Idaho, click here to get pre-approved now!
