Tips for a First-time Home Buyer Part 1

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Tips for a First-time Home Buyer

So you’ve made one of the biggest decisions of you life, you want to purchase you first home, but are you finances in order? Even if you are not planning to make your first home purchase for 3-6 months there are still a number of improvements that you can make now before taking on a mortgage.

What can you realistically afford?

One simple was to do this is to use one of the many online calculators, this will give you a basic idea of what you can expect your monthly house payment, Property taxes and insurance payment to be. Also on your first meeting with your Real Estate Agent they will most likely ask you if you have been pre-approved for a mortgage and if not will be able to recommend a few mortgage professionals that they have worked with in the past.

Getting your financial house in order.

One thing a mortgage professional may suggest is months before you buy a home, begin putting the amount of money that you will have to use for a house payment into a separate bank account. Save that money rather than spending it for those months, and see how you do at managing your other bills with only the money that is left.”

Don’t forget to take taxes into account also. Also hold the down payment (3.5% minimum) plus closing costs in a savings account for more than two months and provide bank statements to demonstrate that it was earned and not gifted.

If you have any old negative information that should have rolled off contact the credit agency to get it removed, also pay off any lingering old bills that you’ve forgotten about. If you’re behind on any payments, get caught up.

Next, check your credit score, which you’ll want to nudge up to as high a number as possible. This is where paying down your debt comes in, aiming for an amount that doesn’t equal more than 30% of your line of credit.

One tried method to having a good credit score is to make sure that you have at least three open and active lines of credit. You need this for the credit score to have enough data to crunch. The model also likes for you to have a good mix of credit. For instance, an open-ended account (general purpose card), a closed-end account (car payment) and a personal loan. This demonstrates that you can handle multiple types of credit responsibly.

Defining Search Parameters for a First-Time Home Buyer

Almost 80% of all home searches today begin on the Internet. With just a few clicks of the mouse, home buyers can search through hundreds of online listings, view virtual tours, and sort through dozens of photographs and aerial shots of neighborhoods and homes. You’ve probably defined your goals and have a pretty good idea of the type of home and neighborhood you want. By the time you reach your real estate agent’s.

We are Frisco, TX home specialists. If you have any questions about real estate in Frisco, or any neighboring DFW communities, please fill out our contact form, or call 469-556-2393 for assistance.

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Nick Walton
JP And Associates REALTORS

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