Valuable Insider Tips For First Time Home Buyers
Part 2 of 2
Purchasing your first home certainly comes with a great deal of big decisions. It can be both exciting and scary at the same time. That being stated, it is easy to get caught up in a bunch of mistakes that can make the process significantly more nerve-racking. As you know, working with an experienced, caring, and highly qualified Realtor can make the difference of an enjoyable buying process and one that is full of disasters. In part one of this article, we provided you with a few valuable insider tips for first time homebuyers. The following information will supply you with a few more helpful tips
Ensure That Your Financial Affairs Are In Order
Unless you plan to purchase your new home in cash, you will need to apply for a mortgage with a bank or lender. That means you must make sure that your financial affairs are in order before applying for the loan. In addition to the down payment, the bank or lender will want you to prove that are responsible, and have the financial ability to pay the mortgage on a monthly basis. It all starts with your credit. When you apply for a mortgage, your credit is one of the key factors that determine whether or not you are approved for the loan.
Your credit scores also help to determine the interest rate, and other important loan terms. It is incredibly important to check your credit prior to starting the home buying process. Look for opportunities to improve your rating. For example, if you have any outstanding debts pay them off immediately. If there are errors on your credit report that are dragging down your scores, dispute them without delay. Even if your credit scores are perfect, you should avoid opening any new credit accounts, such as an auto loan or credit cards, until after your mortgage closes.
In addition, you should avoid making any large purchases with your existing credit cards or credit lines until after your mortgage closes. You may want to avoid making any large purchases for a while after purchasing your new home in order to start saving for an emergency fund.
Other Financial Related Aspects To Consider
In addition to the mortgage and down payment, there are a few other financial related aspects that you should be aware of when starting your home buying journey. In essence, you need to have the cash on hand in order to pay for them. First and foremost, once you have a deal in place with the seller, you should schedule a home inspection. Although a home inspection is not technically required, it protects the buyer by providing you with valuable information about the condition of the property. The typical cost of a home inspection is $400 for a single-family property, and can run upwards of $800 or more for multi-family properties.
In addition to the cost of the home inspection, the buyer is responsible to reimburse the seller for any oil that is in the tank at the time of closing. With the current prices of oil, that can run upwards of $500 or more depending on how full the tank is. Last but certainly not least, it is always a good idea to pre-pay the property taxes and property insurance in order to build your escrow account due to the fact that both the taxes and insurance amounts can increase over time.
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