Excitement is in the air when it comes to being a first time home buyer.
In 2019, the United States saw the largest boom among first time home buyers. Of the millions that bought homes, 29.8 percent of the national market was made up of new home buyers. This is a five percent increase in comparison to previous record numbers.
If you’re soon to join this list, you’ll want to know these 6 tips for first-time home buyers before putting in an offer.
1. Previous Debt and Emergency Funds
Before you add debt to your credit history, make sure you have the money to make a smart decision.
Home buying is expensive. This is especially true depending on the type of neighborhood you live in. Aside from the upfront costs of purchasing a home, you’ll be making investments in the property and any maintenance necessary.
Make sure you have enough emergency money and previous debt eliminated.
2. Set a Budget
Before you start saving money you need to determine your home-buying budget. First time home buyers rush into the process without reviewing their finances.
You can use helpful online resources to help you determine what your budget is. Settle on a price range that reflects your budget, relationship status, credit score, down payment, and location.
3. Consider Mortgage Options
There are a few different categories of mortgage options when you’re looking to buy a home.
Conventional mortgages, FHA, USDA, and VA loans are all worth looking at. Depending on your situation, one may provide a better interest rate or payment figure.
The longer the loan is in years is linked to the interest rate of the loan. Fewer years means higher payments but less interest paid over time. Choose an option you can afford.
4. Closing Costs
Buying a house is the beginning of additional fees you’ve never heard of. Closing costs on average cost about three to four percent of the purchase price of your home.
They’re necessary to pay the appraisal, home inspection, credit report, attorney, and homeowner’s insurance. Make sure you’re keeping closing costs in mind when you’re budgeting for a home.
5. Ignore Emotional Attachment
It’s easy to fall in love with a house you can’t afford. Emotional attachment is the root of making poor life choices.
Although this sometimes doesn’t backfire, getting too attached when buying a home can string your money out thin. Make sure you’re following the six tips for first time home buyers that we’ve laid out.
If not, you might find yourself bidding out of your price range.
6. Unicorns Don’t Exist
Unicorns, or the perfect house, is a common term in home buying. Although you want your first home to check all the boxes, it doesn’t have to.
Sure, sometimes the perfect situation falls into your lap. Most of the time this isn’t the case and if you find yourself waiting around for the house that checks all those boxes you might be waiting forever.
Follow These 6 Tips for First-Time Home Buyers
If you’re ready to use these 6 tips for first-time home buyers and make an offer, you need a company you can trust.
Next Home Elhm Reality is there for you. Tips for first time home buyers can make a break a purchase. If you’re led astray you’ll find yourself overpaying with additional stressors you don’t need to force on yourself.
That’s where we come in. Give us a call today to discuss some excellent Minnesota homes we have listed on our website.
You’ll be glad you took the time to prioritize your future home.