The home buying process can be overwhelming and navigating through the financial pitfalls can be an arduous endeavor. Here are some financial tips to remember when buying your first home.
- Improve you credit score. Review your credit score before applying for pre-approval. Pay down your debts and don't make any large purchases that will drastically alter your score.
- Get pre-approved. Pre-approval usually means the lender is ready to make you a mortgage loan after thorough research into your finances. Pre-approval gives you an accurate idea of what properties are in your price range, and could give you a competitive edge in negotiations.
- Set a realistic down payment. Don't put all of your savings into your down payment. Although a down payment of more than 20% of the overall cost of the property may save you from paying mortgage insurance, you may want to think twice about leaving yourself without a cushion.
- Think big picture. Consider a long-term budget and factor in all additional expenses of homeownership. Taxes, utilities, home insurance, maintenance, and even pricey repairs should be part of your budgeting.
- Consider re-sale value. Even though future resale is the last thing on your mind when buying your property, it is a practicality to consider. A home that appeals to the majority of buyers, in an ideal location with a reputable school system may be a wise investment.
- Consult with a financial profession and mortgage consultant for more guidance.