It is needless to say that all first time home buyers haven’t ever gone through the intimidating experience of purchasing a home and they’re often advised about the hard way that making a single wrong decision can take a costly and stressful toll on your future financial life.
Buying a home involved different steps like getting pre-approved for mortgage loans, finding the right mortgage agent, looking for the right home that is within your means, following a frugal budget while repaying the loan and facing some sort of financial challenges. Are you scared by reading the aforementioned steps? Well, you need not fret as once you get a grip on the process, everything will tend to fall in its place.
Check out some vital essentials that you need to know about the process of taking out a mortgage loan, being a nascent home buyer.
- There’s more than just making the mortgage payments: Whenever the novice home buyers feel that they’re ready to take out a mortgage loan, they immediately take the plunge. But the fact is that just because they can afford the monthly mortgage installments doesn’t make them ready to own a home as there’s more to it than making just the monthly mortgage payments. Taxes, home owner’s insurance fees, maintenance costs, property insurance, water and electricity bills are some of the other costs that are added as a bonus when you buy a home mortgage loan. Moreover, insurance costs and property taxes tend to rise every year. So, even if you think that you will be bear the mortgage loan now, ensure whether you’ll be able to bear them throughout the term of the loan.
- Always seek professional help to stay safe: When you’re someone who is new to the home buying game, you’ll probably need the assistance of a trustworthy loan officer, a lawyer or might be a reputable real estate agent who can guide you through the process of locating a home and a mortgage loan. If you take the risk of venturing into this game all on your own, this won’t be rather a wise idea. Hire an agent after checking out the references from the previous homebuyers and then take the decision of hiring him.
- Search for the mortgage first and then for the home: If you were of the notion that homebuying begins with searching for a home, you were wrong. Homebuying actually begins with getting pre-approved for a mortgage loan unless you’re rich enough to pay down the entire money in cash for your house. Most often it is seen that the first time homebuyers get scared to get pre-qualified for a mortgage but this shouldn’t be the case. You might approach an FHA lender for getting a loan that is backed by the FHA if you don’t have a huge down payment and a stellar credit rating.
- Never burn out all your savings for the down payment: When you’re a first time homebuyer, you tend to listen to all that which is advised to you. People usually scare you about the practice of qualifying for the PMIs when you fail to pay down 20% of the total loan amount. But this shouldn’t force you to shell out all that you have in your savings account for making the right down payment. Being left with no savings is a curse and this will also take a toll on your future payments.
So, when you’re about to purchase your first home, you must be super excited. Don’t spoil the deal by taking any wrong steps. Keep in mind the above mentioned tips so that you may avoid the most common mistakes that can wreak havoc to your personal financial state.
Author Bio: Shane is a financial writer,he has also made notable contributions through various articles written on different subjects related to the real estate industry.This article is about the Mortgage loans for the nascent home buyers.