Nearly 65.8% of Americans own a home. The numbers can be much higher, but the lack of information on budgeting and planning when buying your first home can make it a daunting experience for prospective buyers.
Instead of giving in to the fears and finding out too late that you should’ve started planning to buy yourself a home, here are some tips that can help prospective homeowners on a limited budget!
Start Saving Early
In order to start saving, you need to know what you’re saving for! Many newcomers into the market just save for the selling price and find themselves scratching their head at the other costs they weren’t aware of.
When saving for a home, make sure to save for a down payment, closing costs, and move-in expenses.
- Your down payment will depend on your mortgage type and your credit score. Some loans will give you the option to go as low as 3% in your down payment if you’ve got a good track record. It’s advised to use a down payment calculator to get a rough estimate of how much you would be expected to give to lock down your future home.
- Closing costs are paid to finalize your mortgage and hand over the title of the home to you. The payment could be anywhere from 2% to 6% of your total loan amount.
- Moving expenses depend heavily on where you’re moving from. If it’s within the same neighborhood, you can be a little less stressed about the money. But if it’s out of city or further away, your moving costs can increase accordingly.
Pick A Good Real Estate Agent
If you’re new to the home buying market, get yourself a real estate agent. They know the ins and outs of real estate and can help you make the right choices. The last thing you want to do is go in blind!
A good real estate agent can guide you through the process of closing and down payment costs. You can also list down your requirements, and they can help you find someone close that fits your budget. Think of them as your personal home shopper who are also your go-to person for any questions.