- August 15, 2017
- Posted by General Electric Credit Union
- 4 read
5 Tips for First-Time Homebuyers
Buying your first home is a huge undertaking, and there are dozens of details and to-dos to take care of during the process. Below are some handy tips to keep in mind to help your first home buying experience go a little smoother.
1. Determine how much house you can afford, and stick to it.
Buying a home is a very emotional process, and it's easy to get stars in your eyes when you find out that you can qualify for a larger loan than what you might have first imagined. The important thing to remember is just because you can qualify for a certain loan amount, doesn't mean that you need to borrow up to that limit. Take stock of all your fixed monthly expenses, and then determine a realistic amount of money you can pay every month for your home mortgage.
This amount should include not only the mortgage itself, but also mortgage insurance as well as the regular maintenance costs of living in the property. Even if you fall in love with a particular house, you need to keep looking if the monthly mortgage will be more than what you can reasonably afford. Keep a clear head, so you can avoid stress later down the line.
2. Avoid opening any new credit accounts during the home buying process.
If you are in the middle of securing a home loan, it's not a good idea to open any new credit accounts during the qualifying process. For example, it's not a wise move to purchase a new car on credit right before you attempt to find a mortgage lender.
With every new credit account you open, you alter your risk profile in the eyes of lenders, and your ability to pay them back becomes more uncertain in their eyes. Whatever credit accounts you currently have open, let them stay as they are, and be sure not to pile on any unnecessary debts if you can at all help it.
3. Create a list of "non-negotiables" for your ideal home.
You know what you want in a home, and while it's rare that any one house will have absolutely everything you're looking for, there are some things you know you simply can’t do without. For example, if nothing but a four-sided brick home will do, then be sure to put that down on your list. Write down specifics regarding square footage, location, amenities, etc., so your real estate agent can have a solid set of criteria to go by when they begin searching for your dream home.
4. Don't be afraid to ask a lot of questions.
Whether you're talking with your realtor or a seller, be sure to ask as many questions as needed to get peace of mind about moving forward. If you notice something odd or "fishy" about a property, don't be afraid to ask questions to gain more clarity; after all, this is your hard-earned money and you don't want to leave anything up to chance when you're going to be on the hook for hundreds of thousands of dollars.
5. Ask about expected closing costs.
Many borrowers have encountered some "nasty surprises" when it comes to closing costs; be sure to talk to your mortgage lender to get a good estimate of what the closing costs will be for your home purchase. This can save you quite a bit of stress during the closing process, and it will help you prepare your budget accordingly. Learn how mortgage loans with GECU means $0 closing costs on your home.
Your home is one of the largest – if not THE largest – purchase you will make in your lifetime. For this reason alone, it's a good idea not to rush into it or make any hasty decisions as a first-time home buyer. Keep the above tips in mind during the process, so your first home buying experience can be a positive one. When you’re ready to start applying for your first mortgage for a home contact our mortgage professionals!