Planning a wedding is usually an exciting time for engaged couples, but one of the biggest considerations is where they’ll live together afterward if they don’t already have a place of their own. Many are looking to buy a home for the first time, but those who are younger and don’t have the
Mortgagecalculator.org reported that a significant number of homebuyers in the U.S. must secure a mortgage loan in order to finance the purchase, as few have enough cash to buy one outright. Of course, if a couple have enough money saved for the down payment and other expenses like closing costs it can be the perfect time to begin the house-hunting process.
This guide can help reduce pitfalls and smooth out inevitable bumps along the way to make the first-time home-buying less stressful.
It’s a must to create a budget for your home purchase as part of the planning process. You’ll want to ensure you can afford the monthly payments and all of the other expenses involved to avoid getting in over your head. Sometimes the thought of becoming a homeowner can make you forget that you’ll want to be able to enjoy life while still living within your means. Of course, lenders will generally only loan you what they think you can afford, which means getting preapproved can help to determine what amount you’ll be qualified for. A house payment calculator can provide a good idea as to what that figure will be before going through the process.
Write Down a List of Your Needs
Before you start house hunting, one of the first steps to buying a house is to get together with your future spouse to create a combined list of the essentials it should include. If you’re planning on having children in the near future, for example, a one-bedroom probably won’t cut it, you might need a minimum of two or three. Taking some time to negotiate what features you’re looking for will make the process much easier by avoiding homes that don’t meet your needs.
Work on Improving Your Credit Scores
If your credit scores aren’t at least 740, work on improving them to get the best interest rate when you’re ready to buy. While it is sometimes possible to get a loan with a credit score lower than 670, or even 600, your interest rate will be much higher, and so will your monthly mortgage payments.
Make Sure Your Savings Are Where They Should Be
You might have to hold off on buying until you have enough money saved. Not only will you need to make a down payment, but you’ll have to pay for closing costs and other fees. Additionally, lenders usually want to see that you have enough in savings to make your monthly payments should a job loss or other unexpected circumstances occur. As it can take quite a while to save if you don’t have a significant amount already, you’ll want to start saving as early in the process as possible while looking for ways to cut back on spending.
When you have all the cash you need, your credit scores are up to par, and it’s time to start searching for that perfect home, don’t rush. Even in the most demanding markets, as this is probably one of the biggest financial commitments you’ll make, it’s important to put a lot of thought into it. You’ll want to make sure that it will be liveable for your situation now and in the future.