Skip to main content

First time home buying: How to plan and prepare for it

If you are planning to buy your first home for quite a few months now, then this is the best time to do so. Due to the low mortgage rates as well as various other tax incentives, mortgage applications have surged in the recent times. Purchasing a home, whether first or not, can be both exciting as well as a daunting task. However, if you plan and prepare for the home buying process in advance, then you won’t have to face any complicated or stressful situation.

Preparing for the home buying process…

In order to prepare yourself for the home buying process, read through the below mentioned tips:

1. Save money for down payment: Saving money for down payment is very important. Unless you have a lump sum amount saved in your bank account for down payment, you may not qualify for a mortgage. You should have 20% down payment for a conventional loan. However, for FHA loans, you need to have a down payment of 3.5% - 5%. So, it is always advised that you start saving money as soon as you plan to buy a home.

2. Don’t get pressurized: Buying a home, whether first or not, is a huge financial decision. So, don’t get pressurized. Take your time and decide on home buying. You can consult your spouse, family members as well as friends in this regard. Just because the home prices or interest rates are low, don’t jump into buying a home.

3. Determine your home affordability: You should always go for a home which you will be able to afford in the long run. Taking out a huge mortgage for a property which you won’t be able to afford later on will be a foolish act on your part. You can check out the various online mortgage calculators in order to know your home affordability. 

4. Improve your credit: Your credit is the most important thing which the lenders will look into while approving you for a first time mortgage. So, take necessary steps to improve your credit if you don’t have the right scores to qualify for a loan. It should be noted here that to qualify for conventional mortgages, you need to have a score of 700-720 whereas FHA lenders may require a score of around 620-640.

5. Get pre-approved for a home loan: Before you start shopping around for your first home, you should get pre-approved for a mortgage. This will make it easier for you to find and purchase your dream home. Also, a pre-approval will mean that you’re seriously interested in buying a home. A pre-approval for mortgage is considered as a positive sign by the sellers.

Apart from the tips mentioned above, it should be noted here that renting a home for time being is not a bad option and has its own advantages. So, if you’re not sure whether or not you should buy a home now, you can rent a property. You should buy a home only when you’re ready for it, both psychologically as well as monetarily.

Comments

Popular posts from this blog

Why it’s important to save for retirement

While retirement may seem far off in the distance for some, financial experts say you’re never too young to begin saving.  In fact, the earlier you calculate your retirement needs and start building your nest egg, the easier it will be to create a viable plan for the future. Many experts advise you begin saving a percentage of your income for retirement as soon as possible, no matter how little the contribution may be, as it’s possible the Social Security benefits millions of people currently depend on may be in jeopardy.

Low interest credit cards - how to make them work for you

Credit cards are borrowing instruments, unlike debit cards where you already have the money. Banks are there to make money too. Just like high street stores, they hope to maximise their profits within the rules. So it’s important to understand the basics and find a credit card that’s right for you – you can compare low APR credit cards here . Now you know the rules, let’s find out how to play the game. The financial services industry charges interest on the money that it lends out. Let us assume you borrow £100 on your credit card and keep it for exactly one year before you pay it back. For the purposes of this article, we will assume your loan attracts 8% interest per year, which is the Annual Percentage Rate, or APR for that particular transaction. Practical example

Brief Overview of Credit Card Machines

The world has witnessed so much of modernization eliminating the cash transactions from businesses. These days we have all sorts of online transaction which is popularized by the help of credit card machines. This is a device that can do transactions with a debit card or a credit card. Credit card machines securely transmit funds from one account to another. It is a Point of Sale terminal that can do transaction with a credit / debit card. This machine allows a merchant to insert, swipe, or key in manually the required credit card information and transmit such data to the merchant service provider for consent and then later on the transfer the fund to the merchant. It is used by merchants to directly capture card information instead of manually entering it in card details. Credit card machines are efficient enough to provide the benefit of decreased transaction processing times.

Four Things to Know About the Housing Market in 2021

Due to the Covid-19 pandemic, the increase in the number of people working from home as well as the initial ban on property transactions in the first lockdown, the housing market in the UK was majorly affected. After the first lockdown, the housing market restarted in the UK and was allowed during the second and third lockdown. The government introduced the stamp duty holiday which definitely helped boost the housing market as well as the buyer's confidence, and due to its overwhelming success, this scheme has been extended till July 2021. Even though the demand for homes increased, the average price of property rose in certain areas and government schemes worked like a charm, the housing market was nowhere close to where it was before the pre-Covid era. While no experts can predict with any amount of certainty the future of the housing industry in the UK, here are the four things that you need to know about the housing market in the UK in 2021. Increase in demand for properties in

Peer-to-peer Lending Oprions for Students

Is peer-to-peer lending safe? Going to college is necessary in this day and age if you hope to get a good paying job. However, finding the money to do so isn’t always easy. One method of getting money for college is to take out a student loan from the government. Another is to go a private lending institution, such as a bank or credit union. A third method, and one that is becoming more and more popular, is to get a loan from a private individual. This type of loan is usually called peer-to-peer (P2P) lending. Following are a few options for students who are seeking a peer-to-peer loan. What Is Peer-to-Peer Lending? Peer-to-peer lending is essentially a financial agreement that takes place between individuals. One party, you, borrows money from someone else. It works the same way as a traditional loan because unlike a scholarship, grant, or gift, you will be expected to pay the money back, on time, and with interest tacked on. You and the lender agree on how much will be paid back wit

Responsibilities a Property Management Company Needs to Handle

When you are considering investing in a residential or commercial property, you need to plan a number of things. At such times, getting help from the right professionals may be of immense help. You may consider opting for property management companies for handling the responsibilities. Understanding the tasks, before and after the purchase, these companies handle is necessary before you employ them.

Why comparing ISA rates is a necessity?

Investment is not about the capital you put in an account, it is your ability to judge risk and return trade-off. Unless you weigh your decision carefully you may end up making no profit. Choosing the best ISA provider therefore could be a difficult task. If you are investing in cash ISAs you must have few hundreds of options to test the best. One should compare ISA rates for the bigger return. But who can help you on this? How do you know which Cash ISAs is giving better interest rate? What are the terms and conditions? Who are the account providers? Are these accounts easily accessible? What others are talking about those ISA accounts?  How advantageous cash ISAs could be in terms of risk coverage?