Buying a first home can be scary but with careful preparation and planning the process can go smoothly. Here’s some information that first time home buyers should consider.
Buying a home is a big investment and can come with costly repairs or unexpected problems. A first time home buyer should make sure they understand what goes into buying a home before they jump in.
The first thing a first time home buyer should do is check the selling prices of similar homes in the area that they are looking to buy in. After they have researched selling prices on MLS listings in the area, they need to determine if they can afford the home and estimate the monthly mortgage payments using a mortgage calculator. A maximum mortgage payment should not exceed 28% of the buyer’s gross monthly income.
Next, they need to determine what the total monthly housing cost would be including taxes and homeowner’s insurance. The maximum total housing payment should not exceed 32% of the buyer’s gross monthly income. To find out what the homeowners insurance cost could be, contact an insurance agent for an estimate.
Once, a first time home buyer determines all of the costs associated with monthly payments for the home, they need to look into how much they will need to pay at closing. Closing costs can include origination fees charged by a lender, title company fees, taxes, or settlement fees and prepaid items including homeowner’s insurance. Closing costs should be around 20% of the buying price. To find out what the average cost of closing fees are in your area, contact Meridian Mortgage.
Now that a first time home buyer has determined if they can afford a house, they are ready to begin the home buying process. Below are steps of the home buying process.
Check credit score: If there are any issues with your credit try to get them resolved quickly.
Get pre-approved for a mortgage: Contact lenders and local credit unions to find the best mortgage rates. There may be a credit inquiry fee. Fill out mortgage application online.
For more information on buying a home, home loans or applying for a mortgage rate, contact Meridian Mortgage at 317-968-9500 or contact us online.
Meridian Mortgage Solutions is a subsidiary of Endeavor Capital, LLC Licensed through the Indiana Department of Finance and Insurance. License #17519 & 17520, NMLS#222524
Endeavor Capital, LLC and its DBA's are not acting on behalf of or at the direction of HUD/FA or the Federal government.
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