5 Tips for First-Time Home Buyers

Buying a new home can be exciting, empowering, thrilling and even a bit scary. Doing your research on new homes and understanding your financial situation can help you buy a home that will suit the needs of you and your family. Here are five tips for first-time homebuyers.
1. Know Your Credit History
Before you begin looking for a new home, take time to review your credit history andcredit report. Make sure all of the information listed on your credit report is fully updated and accurate. If there are any errors, dispute them so they can be removed. Ultimately, your credit history and credit score play an important role in the mortgage amount and interest rate that you will qualify for.
2. Know the Mortgage Amount You Qualify For
There’s no point in falling in love with a home you can’t afford. Working with lending professionals can empower you during the home-buying process. By meeting with a lender to get prequalified or preapproved for a mortgage, you’ll know your budget for a new home and can begin shopping in the appropriate price range. If the houses in your price range don’t meet your standards, take a little more time to save a larger down payment or improve your credit.
3. Save Up for Your Down Payment
When saving to buy a home, plan to have 20% of the home’s value ready for a down payment. Having your payment ready lowers your overall mortgage costs and makes you a more attractive buyer in a situation with competing bids. If you can’t afford 20%, your mortgage loan officer can provide you with more information about other options available. Also, ask your lender to help you estimate the other fees associated with the closing process, commonly called closing costs. These fees will include legal, property tax, survey, title insurance and recording and underwriting fees. Some of these closing costs can be financed as part of your mortgage, but others will need to be paid up front.
4. Evaluate Any Outstanding Debts You May Have
If you have significant outstanding debts, such as student loans, know that this could impact the total mortgage amount that a lender offers to you. You may want to pay down significant outstanding debts and liabilities that you have listed on your credit report. Taking care of these debts beforehand can put you in a better position to qualify for a new mortgage.
5. Figure Out the Home That You Can Afford
Your lending professional has tools and calculators to determine how much home you can afford, but ultimately the answer is up to you. In addition to your mortgage payment, consider other costs associated with your new home, including monthly utility bills, landscaping costs, community association fees and property taxes. Also, take into account the sort of lifestyle you lead: Do you need to take a vacation every summer? Are you planning to start a family or go back to college? Consider your unique situation, and choose the home that is right for you.
Visit usbank.com for more information for first time home buyers.

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