Tips for First-Time Homebuyers

If you’re a first-time homebuyer, the whole process can seem pretty overwhelming. You’re likely working with multiple people – like realtors and mortgage lenders – and plenty of financial and real estate jargon gets thrown around. The whole experience can be both stressful and exciting. There are a few tips for future or first-time homebuyers that can make the entire process go more smoothly, and to keep any surprise expenses from being too… surprising.

Know your credit score.

When you’re taking out a mortgage loan, your credit will be one of the key factors in whether you’re approved, and it will help determine your interest rate and possibly the loan terms. Check your credit before you begin the home buying process, and dispute any errors that could be dragging down your credit score. Look for opportunities to improve your credit, such as paying off any outstanding debts (or at the very least a large chunk of it).

Determine what you can afford.

Before you start looking for your dream home, you need to know what’s actually within your price range. Use a mortgage calculator and really crunch the numbers to be sure you’re staying within a realistic monthly budget.

Save for a down payment.

It’s common to put 20% down, but many lenders now permit much less, and first-time homebuyer programs allow as little as 3% down. But putting down less than 20% may mean higher costs and paying for private mortgage insurance, and even a small down payment can still be hefty. Some tips for saving for a down payment include setting aside any extra money, like tax refunds and work bonuses, and set up an automatic savings plan.

Budget for closing costs.

In addition to saving for a down payment, you’ll need to budget for the money required to close your mortgage, which can be significant. Closing costs generally run between 2% and 5% of your loan amount. You can shop around and compare prices for certain closing expenses, such as homeowners insurance, home inspections and title searches. You can also defray costs by asking the seller to pay for a portion of your closing costs or negotiating your real estate agent’s commission.

If you’re looking for an outstanding resource for mortgage financing, look no further than Pacor Mortgage! 32 years of experience is what makes us the optimal choice for your mortgage needs. For more information about our services and to schedule an appointment with us, contact us at Pacor Mortgage today!