5 of the Things First-Time Homebuyers Need to Consider
First-time homebuyers according to Del Aria Investments Group need to be aware of a few things before purchasing their first home. These include a down payment, Emergency fund, Credit score, and Real estate agent. It's a good idea to talk to someone who you trust about the decision, especially if you're a married couple. This way, they can call you out when you're acting unreasonable.
Many first-time homebuyers have questions about the down payment they should make. While many people assume that 20% is the gold standard, the actual amount you need to pay will vary. The best way to get the right amount is to consult with a mortgage real estate. They can help you decide what type of home loan is right for you and what your future financial goals are.
If you can't afford the full down payment, you can consider getting a loan from family. This can be very helpful for first-time homebuyers. But make sure that you have proof of the gift from your family member. The lender will usually require bank statements or a letter confirming the gift.
Second mortgages are another option for first-time homebuyers. These are government-backed loans with low interest rates. You will need to have a credit score lower than 640 to qualify. Freddie Mac offers "Home Possible" mortgages with down payments as low as 3% for low and moderate-income buyers.
One thing that most people fail to realize is that emergency funds can be a lifeline. Although they will take a large chunk of your income up front, an emergency fund will help you to avoid the worst situations. To build a strong emergency fund, first make a budget. Secondly, pay off any existing debt. Debts can pile up fast if you don't make payments.
First-time homebuyers should have an emergency fund of three to six months' worth of living expenses. The emergency fund should be large enough to pay for any unexpected expenses arising from home ownership. Normally, a down payment of about five percent is required for a home purchase. However, there will be many additional expenses associated withbuy a home, including maintenance and repair costs. For example, if you suddenly find yourself without a job, you may need to make large payments on your home to avoid getting into foreclosure.
Building an emergency fund can also help you pay for costly repairs. An emergency fund should be separate from your down payment, in a separate savings account. It should be easy to access if needed. Besides covering the cost of unexpected repairs, an emergency fund will also prevent further damage to your property.