As with any big undertaking, taking the time to plan and organize the details of a home purchase is essential to an overall successful experience. This involves preparing for the purchase, mortgage selection, home shopping all the way to the actual home buying.

Here are some tips so that your experience goes as smoothly as possible!

PREPARATION

Before you make any moves to buy your first home, it’s best to be as prepared as possible. Key tips include:

1. Save Up As Early As Possible

You’re going to have to spend on your purchase. Make sure you have a budget and that you save up in accordance to it before making any major moves. Consider:

  • Closing costs – When you borrow money to buy a house, you can expect to pay one of two types of fees: origination fees (commonly called points) and settlement charges. These fees typically range from 1% to 3% of the loan amount and cover the cost of the lender’s paperwork, surveys, and costs incurred by third parties.
  • Down payment – The down payment you will need will rely entirely on the mortgage you choose and the lender you get. In some cases, there are conventional loans specifically meant for first-time home buyers…with great credit. What does that mean? It means your credit score has to be in good if not excellent standing. At that stage, you could be allowed to pay as little as 3% of the whole amount as a down payment. That said, it can be challenging to save up even a small down payment. 

Consider a $250,000 home; the 3% down payment would amount to $7,500. A good rule of thumb is to find a down payment calculator and using that as a set goal. From there, set up automatic transfers from checking to savings.

  • Move-in expenses – You’ll need to have some cash handy for a house purchase. You can use it for repairs and upgrades to the home, as well as to furnish it properly.

2. Set A Realistic Budget

When you start searching for a home to buy, figure out how much you can comfortably afford to spend on a house. It’s one thing to be completely enamored with a $450,000 home but only actually be able to afford one that’s $200,000. Be realistic and set a price range based on your credit score, where you plan to move, debt down payment and your income.

3. Strengthen Your Credit

When you apply for a mortgage, your credit score will determine whether you qualify for the best rates. This is why it’s important to have a good credit score. Make sure to get free copies of your credit reports from all three credit bureaus (Equifax, TransUnion, Experian) and dispute any errors. Don’t close any credit cards and pay all your bills on time, too.

Conclusion

Buying a home for the first time is exciting, but it’s important to be prepared. This includes considering the budget and, in turn, mortgage. Saving up as early as possible is vital, especially since the down payment and closing costs are likely going to require quite a bit.

Trying to get a mortgage loan in Utah? Contact Clayson Mortgage today! We provide home loans with the best rates and award-winning service.