As many as nine million people became homeowners for the first time in 2020. Did you know there are first time home owner programs and loans specifically for people buying their first home?
If you’re thinking about being part of the “first time home owner club,” you probably have many questions. If you have less than perfect credit, you may be concerned with getting a loan. Let’s look at three tips to help you get the home of your dreams, no matter your financial situation.
1. Start Saving Now
Before you start looking for your first home, set aside money for the down payment, closing costs, and moving expenses. Some home mortgage lenders require as little as three percent as a down payment, but three percent of a $300,000 mortgage is $9,000.
Closing costs will be about three to five percent of your total loan amount. Moving expenses will vary depending on where you live and how far you are moving. Moving from an apartment to a home can cost between a few hundred to a few thousand dollars.
The longer you can save your money before purchasing a home, the better.
2. Know Your Credit Score as a First Time Home Owner
Buying a home is a significant investment that requires a credit score high enough to qualify for a mortgage. The higher your credit score, the more likely you are to get a loan. A higher credit score will also help you get a better rate on your mortgage.
Check your credit score using an online service. Check for any issues on your credit report and clear them up. If you have a mark against you, work with your creditors or financial advisor to improve your total score.
Poor credit doesn’t automatically disqualify you from a first time home owner mortgage. You may be eligible for a first time home owners loan with bad credit.
For example, keystart home loans are specifically designed for people who may have poor credit, loan defaults, or bankruptcies. The down payment is lower than other mortgages, and you may qualify for first time home owner grants.
3. Buy the House That’s Right for Now and Later
When you are purchasing your first home, it’s essential to think about how your life will look in a few years. Are you planning on starting a family? Is your current job situation stable with consistent income?
Questions like these will help you decide if the house you’re buying makes sense for now and for a few years from now. Find a home that fits your life and your lifestyle.
It’s also important to buy a home you like as it is, not how you think you can make it. Many first time home buyers move into a “fixer-upper” house with plans to renovate. But the expenses are often more than they bargained for, and they end up in a home they don’t enjoy.
Put Out the Welcome Mat
Buying your first home is an exciting experience and a significant milestone in your life. As a first time home owner, there are many questions to ask and lots of preparation. Ensure your finances are in order, consider your financing options, and look for a house that fits your plans for the next five years.
For more information on buying a home as a first time home owner, explore the rest of our site.
