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How to Buy Your First Home: 7 Tips for First-time Home Buyers
October 21, 2022 | Posted by: Onpoint Home Lending
Purchasing one's first home is a dream come true for many people. But scraping together money for a down payment is nothing short of overwhelming.
Our team of experts at OnPoint Home Lending has compiled 7 tips to help you achieve homeownership. Read on to learn how to manage your own money, set your expectations, and find the right down payment assistance programs so you can finally purchase your dream home.
1. Start Saving Early
Homes are a big investment, and the process of buying and moving into one carries additional expenses that many first-time buyers don't expect. This can include:
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Down payments
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Closing costs
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Move-in expenses
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And more
It's important to understand all of the costs associated with moving into your first home. By knowing what to expect, you can plan accordingly.
2. Decide How Much You Can Afford
Determining your budget is essential before you begin looking for a home. This will allow you to plan your finances if a home's purchase price is out of your budget. If so, you can consider looking for a down payment assistance program in the area. However, remember to check their requirements.
3. Check and Strengthen Your Credit
Your credit score determines whether or not you will be approved for a mortgage as well as the interest rates you will qualify for. For example, with a higher credit score, you might qualify for lower interest rates. You can increase your credit score by doing the following:
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Paying bills on time
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Keeping debts as low as possible
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Spending 30% or less of the credit card limit each month
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Checking credit reports to ensure the information is accurate
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Keeping multiple credit cards open
4. Explore Mortgage Options
In order to buy your first home, you'll need a mortgage loan to get started. However, they all have different eligibility and down payment requirements. There are five main categories of mortgages that you can choose from:
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Conventional mortgages
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Jumbo home loans
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Government-backed loans, like an FHA loan
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USDA and VA loans
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Investment property loans
You can even use a mortgage calculator to help you figure out how much you'll need for monthly mortgage payments.
5. Research First-Time Home Buyer Down Payment Assistance Programs
Many state and local governments offer homebuyer education and first-time home buyer programs. These programs may offer down payment assistance, mortgage programs, low-interest loans, and closing cost assistance.
Down payment assistance may also come in the form of a down payment grant if you fall below the program's maximum income limits, allowing you to receive help from local agencies without the need to pay them back.
7. Get a Pre-Approval Letter
A pre-approval letter is a tentative loan offer from a lender showing what you may qualify for. This is, however, not a guarantee. You are also not committed to this loan either. Because you are not obligated to take the loan, it is best to receive one which will show real estate agents that you’re a serious buyer, making them more likely to work with you over other potential home buyers.
Bonus: Contact OnPoint Home Lending for a Mortgage
If you're one of many first-time homebuyers looking for down payment loans or home loans in Kentucky and Ohio, look no further than OnPoint Home Lending. Visit our website or call us at 859-282-0220 to get started.