Over the past several years, first-time property buyers may have shied away from entering the market due to stagnant wages and debt, but times have changed.
As industry experts commented, in the current market scenario only one out of five consumers is actively looking to buy his or her first home or property.
If you are a first-time buyer, the mere thought of securing a mortgage may be causing anxiety. For most people, a home is the largest purchase they will make, and very few can take on this purchase without a loan. Here are some helpful tips and best practices for first-time buyers:
- Save for the down payment: Most mortgage lenders require a cash down payment of 20%, or 30% of the sale price. Buyers today may find it difficult to save for a large down payment, especially young adults saddled with substantial education loan debt. It’s always advisable to plan and start savings early in life.
- Factor in home improvement costs and monthly household expenses: With today’s low inventory of affordable homes for first-time buyers, many buyers will find themselves settling on a home that requires renovations or upgrades. These costs should be factored in at the start of the financing process so that buyers are comfortable with their down payment and monthly payment and will also have money available to make the required improvements. For buyers who stay in rented accommodation the added costs of running a household can be a shock. Monthly costs for utilities, homeowner’s association fees, cable, and Internet, can add up quickly. Factoring these expenses in at the beginning of the mortgage financing process can help borrowers better assess their overall budget and a realistic monthly mortgage payment.
- Get educated: Perhaps the single most important aspect of purchasing a property is to fully understand the mortgage and the overall home-financing process. Take advantage of the available online resources, research and research as much as you can.
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