What Every First Time Home Owner Should Know
Know Your Budget
Buying your first home is one of the biggest financial commitments you will ever make. It is important to keep in mind that your new home is an investment and that you need to budget for a variety of expenses beyond the mortgage payment.
Consider setting up a spreadsheet or table to track incoming and outgoing payments and savings. This will help you stay on top of things like HOA fees and utility bills. It will also give you an idea of whether or not you need to make changes to your lifestyle.
Know Your Lender
Mortgage lenders play a crucial role in your home buying journey, but many buyers don’t take their advice. That can lead to some major problems down the road, like paying too much interest or getting stuck with a loan that’s not sustainable for them.
It’s a good idea to talk to several lenders before you start looking at homes. Ask them to provide a loan estimate, which spells out important details such as the mortgage rate, monthly payment and closing costs. Compare the estimates to get a clearer picture of your potential costs.
Know Your Rights
Home buyers have a number of rights, and they should be aware of them. These rights are outlined in federal and state laws.
First-time homebuyers must be in good financial shape, which means putting money aside for the down payment and closing costs. Many first-time homebuyers get caught up with adjustable-rate mortgages, which lure them in with a low rate but end up costing borrowers tens of thousands of dollars more in the long run.