As a first time home buyer buying a home is one of the most exciting and important decisions you’ll ever make. You want to ensure that you’re prepared for all the typical first-time buyer pitfalls, from saving enough for a down payment to understanding your credit score. This blog post will provide some helpful tips to help you feel confident in your decision and have a successful experience on this journey!
- What is a First-Time Home buyer?
- Preparing to Buy
- Start Saving Sooner Rather than Later
- What is the First Time Homebuyer Tax Credit?
- How Much of a Home Can You Afford?
- What Type of First-Time Homebuyer Loan Should You Get?
- What Credit Score Do I Need for a First-Time Homebuyer Loan?
- How Do First Time Home buyers Get Pre-Approved?
- Can I Buy a House with a $10,000 Down Payment?
What is a First-Time Home buyer?
First time home buyers often qualify for special benefits such as low down payments, special grants, and assistance with closing costs that state and federal governments sponsor.
Preparing to Buy
Start Saving Sooner Rather than Later
Below are the costs that you need to consider:
Down payment: Your down payment will depend on the type of loan that you are approved for. Down payments range from 3.5% to 20% or higher. Some loans specifically for first time home buyers may have a lower down payment, such as an FHA loan. But even coming up with a down payment of 3.5% on a $250,000 home will total $8,750. Start saving early and save often. Set a goal and set up an automatic transfer to your savings account each time you get paid.
Closing Costs: These costs are typically between 2% and 5% of your home purchase price. The seller could pay some of your closing costs, but you have to negotiate those fees upfront. One of the costs you need to pay close attention to is the home inspection fee. Your lender will want you to use their preferred provider. Shopping around could save you some hard-earned money!
Moving Expenses: Make sure you set aside extra cash to move into your new home. And also for future upgrades, repairs, and new furniture.
What is the First Time Homebuyer Tax Credit?
The first time home buyer Tax Credit is a tax credit that first time home buyers can use to reduce their federal income taxes. The amount of the credit depends on the amount of credit available in the area where your home is located.
Make sure you speak with your lender about all options that are available to you.
How Much of a Home Can You Afford?
Many first time home buyers make this mistake and end up “house-poor” with little left after making their monthly mortgage payment to cover other costs, such as clothing, utilities, vacations, entertainment, or even food. Please consider that someone who is house poor might not be able to pay their debt each month.
So, how much should you spend on your first home? That depends on what kind of buyer you are and how large your family will be. For example, if you aren’t sure how long you’ll stay or if you want to keep future options open, start small and work your way up. But if you have a family, save up more so that there’s room for them! To see what’s available in your area, check out First Time Home buyer Grants and Down Payment Assistance programs in your area.
What Type of First-Time Homebuyer Loan Should You Get?
It depends on your credit score and the amount that you want to spend. First time home buyers are usually eligible for a special loan program with lower interest rates or fees than other loans available. These programs are designed to make the process for first-time homebuyers as easy as possible. Some of the loans that you might qualify for include: FHA Loan First Time Home buyers Tax Credit Program (The First Time Home buyer Tax Credit) USDA Rural Development Loans, and VA Loans.
What Credit Score Do I Need for a First-Time Homebuyer Loan?
You might be eligible for one of the First time home buyer programs with different minimum credit score requirements. First time home buyers are usually required to have a credit score of 620 or higher
How Do First Time Home buyers Get Pre-Approved?
You can get pre-approved by a lender for a First Time Home buyer Loan. This will help you understand your purchasing power and budget as well as give you peace of mind that there’s financing available when you find the right home.
There are online tools available that you can use to calculate your monthly mortgage payment or even look at different First Time Home buyer Programs that are available in your area. Start by checking with a First Time Home buyer Grants and Loans program! Make sure you speak with lenders about options, down payments, and closing costs as well!
Can I Buy a House with a $10,000 Down Payment?
Yes, $10,000 is enough of a down payment to buy a house! First time home buyers will typically be eligible for special loans and programs with lower interest rates. Find out more about your options by speaking to lenders about First time home buyer grants and down payment assistance programs in your area.
Make sure you get pre-approved by a lender first. This will help you understand your purchasing power and budget as well as give you peace of mind that there’s financing available when you find the right home.
First time home buyers often have a lot of questions and concerns about the process, but don’t worry! There are many tools available to help you calculate your monthly mortgage payment or even First Time Home buyer Programs that are available in your area.
First time home buyers should speak with a lender first – this will give them peace of mind as well as understanding their budgeting power. It’s important to know what type of loans they qualify for before looking at homes so they can be sure there is financing when they find something perfect! What kind of First Time Home Buyer Loans did you get? Let us know below if we were able to answer any additional questions for you.