First, let us begin by discussing the many emotions you can experience as a first-time buyer, which all are normal and common to experience. Fear, Excitement, Confusion, and Pride. These are expected, it is normal to be scared and have doubt, but that is what your agent and or Mortgage broker are there for. To ease your mind and to put your wants and needs first. Just remember to breathe and relax everything is going to be okay and you are investing in your future.
Now let’s talk money. When saving up for a home, it’s key to have a reserve of cash savings or an emergency fund that isn’t used for the down payment or closing costs. It’s a good idea to have at least 3-6 months of living expenses saved up in this cash reserve. It’s recommended you have a credit score of 620 or higher when you apply for a conventional loan. If your score is below 620, lenders either won’t be able to approve your loan or may be required to offer you a higher interest rate, which can result in higher monthly payments. Right now prices are rising because many people want homes – and are well-qualified to own a home – but there simply aren’t enough properties available for purchase. To summarize, it’s a smart time to buy right now because Mortgage rates may go up. Rent has increased. A 20% down payment is widely considered the ideal down payment amount for most loan types and lenders. If you’re able to put 20% down on your home, you’ll reap a few key benefits. Conventional mortgages, like the traditional 30-year fixed-rate mortgage, usually require at least a 5% down payment. If you’re buying a home for $200,000, in this case, you’ll need $10,000 to secure a home loan. FHA Mortgage. For a government-backed mortgage like an FHA mortgage, the minimum down payment is 3.5%
One of the hardest, and sometimes most stressful, parts of buying a house is finding the right property at the right price. And just because you’re approved for a maximum loan amount, it doesn’t mean you can reasonably afford the monthly payment that goes with that price. This is why your Mortgage Broker is there to help you through this part of the process, to find what fits you and your budget. The best age to buy is when you can comfortably afford the payments, tackle any unexpected repairs, and live in the home long enough to cover the costs of buying and selling a home. As a general rule, your total homeownership expenses shouldn’t take up more than 33% of your total monthly budget. If your anticipated homeownership expenses take up more than 33% of your monthly budget, you’ll need to adjust your mortgage choice.
