What Does it Take to Buy Your Very First Home?

Buying your first home is going to be one of the most exciting times of your life, but this process can also be quite complicated. Those who are not prepared for this responsibility often find themselves struggling with high interest rates or unmanageable payments. Here are a few things you will need if you are getting ready to make an offer on a home.

A Good Credit Score

One of the first steps that you must take when buying a home is to ensure that your credit score is as high as possible. While there is no set number a buyer should be at, those who have higher scores will generally be approved for much better loans at lower interest rates. Buyer should speak with their lending company, like the Assurance Financial Group, to get a general idea of what their credit score should stay at.

Consistent Work History

When a loan officer is determining your eligibility for a loan, they are going to look very closely at your employment history. In most cases, they want at least two years at the same job with a stable or growing income. They will also want you to be able to verify that you will be at the same company for the next three years. Those who have not been with the same company for at least two years might need a letter of intent from their new employer.

A Strong Down Payment

The size of your down payment is going to affect your future interest rates. Most lenders require a minimum down payment of at least three percent, but the vast majority of real estate specialists suggest a down payment of 15 to 20 percent. Lenders offer lower interest rates to those with higher down payments because the buyer is risking more of their own money on the transaction.

Patience

Experienced buyers who have strong assets might be able to buy and flip a home in a short period of time, but first-time home buyers will rarely be that lucky. From the moment you begin your search for a home, you might not receive the keys for a year or longer depending on the local real estate market. The paperwork alone generally takes anywhere from 30 to 45 days to complete from the time you submit your first application.

In addition to the down payment and mortgage payments, it is also important to consider some of the ongoing costs of owning a home including insurance premiums, local property tax, and utility expenses.