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Monday, October 21, 2013

Financial mistakes to avoid for first time homebuyer.

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.
  1. 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.
  2. 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.
  3. 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.
  4. 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.
  5. 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.
  6. Consult with a financial profession and mortgage consultant for more guidance.

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