When it is finally time to buy your first home, you want to ensure that you have everything right. This can be one of the most exciting times in anyone’s life. You have finally reached the point where your home ownership dreams are about to come true. It seems like all it takes is hiring a realtor and finding a good mortgage lender. This is not exactly how it happens. It takes more than just getting a realtor and getting a mortgage approval. Here is what to know when buying a house.
- You Only Need to Save 20% Deposit For Your Mortgage
Most new potential homeowners believe that you must have at least 20% deposit before you can be approved for a mortgage. While this was true in the past where potential homeowners needed to have between 20% and 50% deposit, these days there are FHA loans which ask for way less. FHA loans only require you to have a credit score of at least 500 and have the ability to pay 3.5% deposit. This has made buying a house much easier for Americans.
- Not Using A Real Estate Agent Will Save You Money
Most people imagine that they can buy a house without the need of a realtor. As much as you are trying to save money, you cannot overlook the importance of a realtor in the home buying process. It will cost you 3% in commission but will make the whole process worthwhile. Actually, as the home buyer, you do not pay the real estate agent’s commission, this is done by the home seller. Apart from the cost, the realtor does all the groundwork. They find the best homes for your budget and negotiate on your behalf. Therefore, don’t underestimate the value of a realtor in the process.
- Renting Is Cheaper Than Buying
This is a misconception that has made it impossible for most people to even dream about home ownership. Renting a house may seem cheaper, but it is not. The cost of renting today is almost the same as that of paying a mortgage. In home buying, the costs when starting off are the most expensive. It gets easier once the house is yours. In the long run it becomes cheaper than renting a house. Therefore, get out of the renting comfort zone and buy a house.
- You Do Not Need A Home Inspector
This is yet another common misconception. Even brand new homes need inspectors. An inspector will check for any mistakes made during the home building process, and also any home vulnerabilities. It is therefore very important to get a home inspection done. After an inspection, ensure the previous homeowner or the home builder makes any necessary repairs before you seal the deal for the house.
- You Only Need the Deposit to Get A Home
Once you decide on the house or condor for sale you want, you will have to cover several costs upfront. The deposit is usually one of these costs. For a seamless home buying process, consider saving more than just the deposit amount. You will need to pay house appraisals and inspection costs for your new home. It is important to have extra money for these costs.
