What to look for when buying your first home

What to look for when buying your first home

If you are reading this blog, chances are you are thinking about buying your first home. Let us be the first to congratulate you on your decision, we know how big of a milestone it is for people when they buy a home, let alone their first! That’s why we are here to help ease the stress that comes with looking for and ultimately buying your first home.

The process of buying a home really is a big task. You have to be smart with your budget and the time you spend looking for a home. Before you look for your first home, you should have a few things in order to make the process a lot easier.

Get pre-approved for your mortgage

Your first step in buying your first home is going to a financial adviser to find out the amount your mortgage can be pre-approved for. There are many factors that go into what you can get pre-approved for, including your credit score, how much you have saved for your down payment, your weekly income, and the type of home you want to buy. If you don’t get pre-approved before buying a home, you the risk of not being able to put a favorable offer on the home you want.

Have money for a down payment

One of the biggest steps in buying a home, as you have probably been told throughout your young adult life, is to save up for a down payment. Everybody says it, but nobody really explains it! Generally, you should save up at least 5% of the price of the home if the price is under $500,000. However, if you are able to, save up more to put into the down payment. Doing so will vastly decrease the amount you have to pay for your mortgage. Let’s say you save up more than 20% of the cost of the home, when you get a mortgage, it won’t be a high-ratio mortgage, meaning you won’t pay for high-ratio mortgage insurance!

It’s never too early to start saving for your down payment. Pay off your credit card debt (if you have any) and start budgeting your everyday life. Save money by searching for sales on the things you need, and be smart with buying luxury items, if you don’t need that new TV or phone, don’t buy it right away! Save that money for your down payment, it’s a big investment but it’s worth it.

Budget for overseen costs

Buying a home is more than just saving for a down payment and getting a mortgage. You have to factor in moving costs, legal and property transfer fees, buying furniture, and paying for utilities/internet. On average, you should save an additional 2% of the price of the home to help cover these costs. It will also give you a bigger buffer with your money when you start saving again.

These are just some of the things you should be aware of when purchasing your first home. If you have any questions or concerns about anything to do with buying a home, the Collin Bruce Mortgage Team is more than happy to walk you through the home-buying process!