You probably have many emotions as you plan to buy your first house. It is quite an accomplishment!
Before you jump in headfirst, here are some important first-time homebuyer tips to remember.
1. Consider your Short and Long-Term Needs
Buying a house is a significant investment, usually for the long term. As you look at homes, consider what you need now and what you might need as your family grows or changes. Consider whether this is a short-term or long-term purchase, and choose the features accordingly to avoid the need to move prematurely.
2. Understand the Home’s Total Costs
The mortgage payment is only a small part of homeownership. You should also consider the other costs of owning a home, including the following:
- Taxes and insurance
- HOA dues
- Maintenance and repairs
- Utility bills
- Furniture and appliances
Do not underestimate the cost of owning a home to ensure you do not get in over your head.
3. Take Time Building your Credit
Your credit score determines what loan programs you qualify for and what rates and terms you get. The better credit score you have, the more opportunities you will have.
Try building a solid credit history with timely payments, well-managed credit lines, and a good mix of revolving and installment debts.
4. Get Pre-Approved
Before looking at homes, get pre-approved for a mortgage. This ensures you know how much you can borrow and on what terms. Your pre-approval letter will also state what conditions you must satisfy to close the loan.
Pre-approval letters are good for 60 – 90 days, giving you plenty of time to find a home within your budget.
5. Save for a Down Payment
The more money you save to put down on a home, the easier it is to qualify. So save for a down payment as early as possible to ensure you have enough money. Although a 20% down payment is not required for most borrowers, if you can afford it, you will avoid Private Mortgage Insurance and keep your payment lower.
6. Do not Change Jobs or Ruin your Credit after Pre-Approval
After you are pre-approved for a loan, you will go through the underwriting process. During this time, it is important to keep everything status quo. This includes your credit scores, job status, and credit card balances.
Do not change jobs, open new credit card accounts or borrow other loans, or make large withdrawals from your bank accounts. Keeping everything as it was when you applied for pre-approval improves your chances of closing the loan.
Buying your first home is a major decision, and Texas Republic Bank wants to be there for you every step of the way! Click here to complete an application for a mortgage loan, and see how easy it is to buy your first home!
We will walk you through the steps and ensure you understand what is expected and what buying a home entails. From start to finish, we are here to help you achieve your dreams of homeownership.