5 Tips To Help First-time Homebuyers

The first time you buy a home can be both exciting and stressful. Although it has been on your to-do list for a while, there is a lot of preparation involved now that you’re going through with it. From saving money to knowing what’s included in the deal, first-time home buyers usually have many questions about the process. Ultimately, buying an house or condo is just like any other purchase. The more informed you are before signing any paperwork, the better equipped you will be when it comes to making decisions. Having a consultation with a Long Island mortgage broker will help you gain more information. Here are 5 tips to help first-time homebuyers:

1) Create your budget/financial plan

Before starting your search for a home, you’ll need to have a clear budget in mind. Take stock of all your expenses, including rent, car payments, and credit card bills. Calculate how much money you make on a monthly basis minus your expenses. If buying is within your means, sit down with your bank account and make sure you can afford it before applying for mortgages.

2) Start saving up now

If you don’t have enough saved up to make a large down payment on your house, don’t worry. Many first-time homebuyers opt for mortgages where they only put 5-10% of the home value down. This allows them to get started with homeownership sooner rather than wait until they have saved up more money.

3) Figure out what you can afford

Many first-time buyers are surprised when their bank tells them they are only qualified to borrow a fraction of the price of the home they want. If this happens to you, don’t worry, it’s not always indicative of your financial situation. A big part of mortgage qualification is measuring debt to income ratio.

4) Be smart buying vs renting

First-time homebuyers often wonder if they should rent first to “try out” homeownership. While this is a great idea, in theory, the truth is that it’s tough for first-time buyers to know whether renting or buying makes more financial sense for them. Roughly 50% of buyers who are interested in buying end up renting within 5 years of their purchase.

5) Don’t forget renovations

It’s almost guaranteed that your new place will need some work before you can fully move in. It doesn’t matter if you’re buying an older house with loads of character or brand new construction. The important thing to remember is that renovations add value to your home and sometimes more than you spent putting them in.

When buying a new home, there are many factors to consider. Be sure to educate yourself about the process.