Are you looking for a home loan or perhaps needing to refinance your current mortgage? If so, you are not alone. In fact, a report from Home Buyer and Seller Generational found that nearly 60 percent of all homeowners used conventional loans to finance their home. If you are a first time home buyer then you probably have a list of questions surrounding all types of things from which loan to pursue, what a good interest rate might be, what insurance to purchase, and how much money you need for a down payment. A realtor or lending advisor will be able to help you with finding those answers, but below are just three key things to remember on your home buying journey:
The Down Payment – Studies show that nearly 15 percent of all home buyers said that saving the money needed for a down payment was the most difficult step of their entire home buying process. That is mainly because a typical down payment ranges from 10-20 percent of what the purchase price of the home is. That means that for a $300,000 home, a 20 percent down payment would be $60,000. That amount of money is not what many people just happen to have in their savings account ready to spend. The good news is that there are down payment assistance programs all over the country that help people in all types of financial situations!
Mortgage Terms – Will you choose a 15 or 30 year mortgage? What is a good interest rate versus a bad one? Should you choose a fixed rate or adjustable rate mortgage? These are just three of the dozens of questions you might find yourself asking when you are looking to buy a home. Don’t shy away from asking these questions – nearly 60 percent of homeowners wish that they understood the terms of their mortgage better than they do and you do not want to fall into that camp.
Realtors and Lenders – Working with a realtor to find a home that you love is incredibly important, but what many realtors will tell you is that you need to meet with a lender first. That is because only a lender can tell you how much you will be able to afford and how much of a loan amount you qualify for. Without that knowledge a realtor won’t really be able to help you because you might be looking at homes that are completely out of your price range. Remember to meet with a lender before a realtor to make sure you aren’t wasting your time.
Buying a home is a big decision that will affect your life for years to come. Parts of the process will absolutely be stressful, but if you go into it with a bit of foundational knowledge then you’ll be better off. Many cities and towns across America offer free classes for people interested in buying homes so that you can ask questions to experts in the field without feeling like they are trying to get you to buy a house on the spot. Be patience and consider your all of your options. You’ll be glad you did!