If you’re buying a house for the first time, you may not know where to begin. Imagine how it would feel to get your new set of keys and walk inside your own house for the first time—what a milestone! It may be both a joyful and daunting experience! Try not to worry; to make the process as easy as possible, read our list of the top 5 first-time house buying advice.

1. GROW CREDIT CONTROLLED

You will probably need a mortgage in order to pay for your new home unless you are in a position where you can buy a property with cash all at once. Check your credit scores by obtaining reports from TransUnion, Equifax, and Experian, the three credit reporting agencies, before you start looking for a real home. If you don’t have “excellent” credit (above 800) or “good” credit (between 690 and 799), you should try to raise your credit score.

A lower credit score typically means that you will have a harder time finding a lender willing to provide you a mortgage, while there is no one credit score that would automatically exclude you from all lenders. Furthermore, even if you are successful in finding a loan, the annual percentage rate, or APR, will probably be much higher, increasing your overall expenditures. 

Try not to worry if your credit score isn’t the best. In as little as one month, you may alter your spending patterns and see a tiny difference. If your credit score is really low, it can take a few years to improve. But you’re capable of it!

One piece of advice for first-time house buyers is to establish the practice of keeping your credit in good standing throughout the process, since most lenders still do credit checks even after pre-approval.

2. SELECT A SPEND AMOUNT

It’s a misconception, particularly for your first home, that you should purchase the largest home you can afford. To put yourself on the road to becoming a successful homeowner, try to create a budget that is lower than what you can afford. Acquiring a mortgage loan entails making a long-term financial commitment, even if you are accepted for a mortgage that exceeds your monthly income. 

Remember that you are endangering your financial stability if, after paying your mortgage and other payments, your monthly budget for the remaining living costs is too tight. How would you handle yourself if you became ill, lost your job, or had other unforeseen expenses?

Home-buyer tip: For most contemporary houses, annual upkeep and repairs should account for around 2% of the property’s worth. A larger budget for “other expenses” may be needed for older houses or those with costly features or amenities that need to be maintained.

3. GET A LENDER’S PRE-APPROVAL

Find a lender that can provide you with the best mortgage terms and rates. Get a formal pre-approval, or a letter specifying the precise amount the lender will loan you, as soon as you’ve decided which lender to work with. You can then bring this document with you when you go house hunting. When the time comes for you to make an offer on a property, having this letter will give you an advantage over the competition and facilitate the loan application procedure in the event that your offer is approved. 

Buyer advice: Do not let your desires dictate your budget; rather, let it guide you. Your real estate agent will find it easier to stay to your planned budget when they have a pre-approval letter in hand.

4. SEARCH FOR A REALTOR

For the price you’ve set, a competent real estate agent can assist you in finding your ideal house in the neighborhood of your choice. Due to their extensive knowledge in the real estate industry, they can assist you with price negotiations and the completion of the many documents you will need for your new home. You may get even more advice on purchasing a home from a reputable realtor, such as advice on location and accessibility to amenities. 

Home-buyer advice: Getting referrals from friends, relatives, and neighbors is the best method to locate an agent.

5. GO OVER WITH YOUR AGENT FOR INSURANCE

After you’ve determined your alternatives for your house, set up a meeting to talk about your homeowners insurance options with your reliable, local insurance provider. If you’re a first-time home buyer, you may also browse internet resources for tips on how to approach homeowners insurance. 

Homeowners insurance packages may be customized to match your unique requirements and include coverage for your house, personal property, and liabilities. In addition to helping you choose the most cost-effective option so you can stay within your budget, your insurance agent may serve as a resource for homes insurance. 

If you are buying a house with a spouse or other dependant and you do not already have life insurance, you should think about acquiring one to assist ensure that they will not be left in a situation where they cannot afford to pay the mortgage in the event of your death. With that, your insurance agent may also assist you. 

We here at Independent Insurance Associates are thrilled that you are thinking about entering the amazing world of homeownership! Get a free estimate or contact us with any questions you may have about our insurance coverage.