The real estate market is incredibly difficult to navigate since competition is tough among sellers and buyers. If you’re not savvy enough to know the basics of buying real estate, you could get swindled by disadvantageous offers from opportunistic sellers. For this reason, you should reinforce your knowledge of the homebuying process to be a better buyer.
Understanding the Basics of Homebuying
The steep learning curve can be overwhelming for first-time homebuyers, which can cause these people to commit crucial mistakes in the homebuying process. Since buying a home is a major long-term commitment, it will be disadvantageous to alter a contract after settling on a property and mortgage plan.
If you’re a first-time homebuyer, here are three things you should know:
- Future Plans. Buying your first home needs to be purposeful. Otherwise, you’ll simply be putting your money down the drain. Most homebuyers are in the market to purchase a property they can shift into an investment. This is why you shouldn’t treat your first home as a rental property. Remember that it’s a piece of real estate that should alleviate your financial condition in the future. Before you even consider moving into your first home, set your future plans on when you plan to move out the earliest.
- Credit Score. Your credit score will be the bread and butter of your homebuying journey. Without a decent credit score beyond 740 or more, you’ll miss out on potential loaning opportunities with great perks and benefits. While it’s the single most crucial factor for your homebuying journey, that doesn’t mean it’s the only way to secure a loan. You can opt for personal loans that are more lenient when it comes to credit scores. However, these options usually come with higher interest rates. For this reason, you must weigh the pros and cons of every financial option. While it’s possible to secure a home loan without a favorable credit score, you shouldn’t undermine your spending habits. It’s always better to have an expensive set of options, especially when shopping for mortgage rates. This is why it’s vital to raise your credit score the soonest you’re sure of buying your first home.
- Down Payment and Excess Fees. It’s widely accepted that the principal payment should be the first thing you should consider when buying a home. However, it’s a common mistake for first-time homeowners to focus on a home’s price and a mortgage lender’s interest rates. While these two values make a bulk of the repayment value you’ll supplement per month, it’s vital to look at other additional fees that add to your current debt. For example, home insurance, property taxes, and property maintenance will add on top of your monthly overhead costs. Keep in mind that this bill doesn’t even account for utility bills like electricity, water, and internet subscription. Projecting your potential expenses per month will give you a better estimate of what you can actually afford while paying your mortgage.
First Time Home Buying with Desert Springs Mortgage
Although buying your first home is a critical personal milestone, you shouldn’t get too cocky about refusing advice from others. A mortgage plan is a 15 to 30-year long engagement, so you should get as much information as possible when signing a deal. Thankfully, you don’t have to entrust your life decisions to friends or strangers on the internet. By consulting a local mortgage broker, you can expand your perspective on the homebuying process.
Finding experts to assist you on your homebuying journey can open many opportunities in approaching your first home purchase. Desert Springs Mortgage is a mortgage company in Phoenix dedicated to giving first-time homebuyers the right financial solutions. Call us today at (623) 432-1309, and our professional mortgage experts can assist you throughout the entire homebuying process.