Buying a new home can be challenging, especially if you're a first-timer. It's a long process involving numerous critical steps, tasks, and requirements. As a first-time homebuyer, you may probably feel anxious about getting everything done correctly and avoiding any expensive mistakes.
To ease your worry, we've compiled a full home buying guide consisting of buying tips, mortgage selection, and financial health.
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We interviewed Laura Adams, Insurance & Finance Analyst at InsuranceProviders.com, for tips for first time home buyers. Laura Adams is one of the nation’s leading finance, insurance, and small business authorities. When you are considering buying your first home, it is important to be well informed before you sign on the dotted line. That said, let's have a look at some essential home buying tips from Laura Adams.
#1: Understand how much you can afford
The first step is to figure out how much you can safely afford to spend on buying a property without putting your financial health at risk. For that, you should consider your earnings per month and fixed monthly expenses like mortgage payments, insurance payments, taxes, utilities, groceries, children's education costs, etc.
After calculation, you can get a number that you can spend on buying a new house. You can also use home affordability or a down payment calculator as well.
#2: Explore options for mortgage
Many mortgage options are available with different eligibility requirements and down payment options. For instance, you can explore the main mortgage categories and choose the one that suits you the best from the following:
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Conventional Mortgage
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Jumbo Loan
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USDA Loan
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VA Loan
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FHA Loan
#3: Compare mortgage rates
After exploring different options and selecting the one mortgage category, you should request a loan estimate of that mortgage category from several lenders and compare the interest rates, fees, and overall costing.
#4: Get a pre-approval letter for a home loan
A mortgage pre-approval letter is crucial before searching for a house to buy. It basically shows the home sellers and real estate agents your seriousness regarding buying a home, and they give you priority over other sellers.
The majority of the homebuyers do not get a pre-approval letter before looking at the properties. As a result, they fall in love with some properties they can't afford, which further complicates the whole home buying and selection process.
#5: Consult a good real estate agent
Real estate agents are experts in their field. Obtaining their professional advice can greatly benefit your home buying process. You can get all the right answers to your question regarding prices, negotiations, additional costs, market value, and the future value of the home you're thinking of purchasing.
#6: Pick the right type of neighborhood
While looking for a new house, you should pay extra attention to the neighborhood. It's vital that you choose a neighborhood that suits your lifestyle to avoid complications in the future. So, don't rush things and look for the right type of home, neighborhood, and amenities before finalizing any home.
#7: Get a house inspection
After selecting the house, you should get an inspection from a professional because your eyes may not be able to pay attention to the details of the home structure, basement, flooring, wall, and electrical component. After getting it inspected by an expert, you can further negotiate the price of the house with the owner.
Final thoughts:
Purchasing a new home for the first time is very exciting, but you should not take this decision impulsively and research everything before you buy. Once you buy a house, you should get home insurance as soon as possible. You can explore multiple insurance plans on Insuranceproviders.com and compare different companies to get the best home insurance according to your needs.
