Buying a home is a huge decision, and can be daunting as a first time home buyers, especially if you are looking at homes for sale in downtown San Diego. This will be one of the most important financial decisions you will ever make. Buying your first home is a big step to take, and it’s crucial that you make sure to take many things into consideration. Here are five tips to help you get started:
Check Your Credit
Checking your credit is what you must do before you think about buying your first home. Having good credit will ensure you the best interest rate on your loan. This could make a difference of several hundred dollars a month. If your credit is less than excellent, there are many steps you can take to improve your credit. Paying down your credit card balances, and making sure you are on time with your payments, will ultimately help improve your credit.
How Much Can You Afford?
You don’t want to take on a larger mortgage payment than you can handle. It’s important to allow yourself enough extra money every month for unforeseen maintenance and repairs for the home. If you’re currently paying rent, and that rent is comfortable for you, then that might be a good place to start as to what you can afford for your monthly mortgage payment. If you’re not currently paying rent, try to save the amount of money that you would spend on a monthly mortgage.
Get Your Paperwork In Order
In order to qualify for a home loan, a lender is going to typically ask you for your tax returns, pay stubs, and other asset and liability statements. Get this paperwork organized so that you can easily give this information to your loan professional.
How Much Of A Down Payment Do I Need?
Many first time homebuyers use an FHA loan, which requires only 3.5% down. This is great because it’s easier to get into the home, but this type of loan includes additional fees for insurance, which adds to your monthly payment. If you are current active duty military or are a veteran of the military, you can qualify for the VA loan. This requires no money down. Talk to your loan professional about the different options available to you.
5) Find A Great Realtor
Enlist the help of a realtor to help you find your first home. They can help you pinpoint the best neighborhood within your budget. To find a realtor, ask your friends and family for a referral. You can also see who is recommended in the areas that you are interested in moving to.
Like I said, being a first time home buyer can be a daunting task, but with the above five tips, you should have a good start.
If you have any other questions, visit a real estate agent near you to get all you questions answered and more!