People purchasing their first homes often hesitate for years before buying one. The main reason is the cost. Buying a home is expensive, even if you start with a more affordably priced house. If you are a first-time homebuyer, you might want to learn some tips to help you afford your first house. Here are several tips to keep in mind as you begin the home-buying process.
Consider the Right Loan Types
As a first-time homebuyer, you can apply for any loan type you want, but some are better than others. Some loan programs are easier to qualify for than others, and the main types to consider are VA loans, FHA loans, or USDA loans. All three of these loans offer government backing, which means they are less risky for lenders. If you compare these loan types, you might want to consider three main things:
- Credit score requirements
- Down payment percentage
- Debt-to-income guidelines
A lender can help you determine which ones you qualify for and which is best for your situation.
Find a Way to Lower the Closing Costs
Secondly, you may want to consider your options for lowing the closing costs for your purchase. Every home purchase involves paying closing costs, and these costs can be expensive. If they cost too much, it can increase the amount of money you must borrow from your lender. There are ways to reduce the costs, though.
One option is to search for down payment assistance programs, which you can find for first-time homebuyers in some areas. Secondly, you can negotiate with the home seller for these expenses. When doing this, you can ask the home seller to pay some of these costs for you. If they agree, you can save money on the purchase.
Buy the Right Home
The final thing to realize is that the home you purchase makes a big difference with how well you can afford it. When buying your first house, you should realize that many people use their first homes as a way to become homeowners. They do not plan to live in them forever. Therefore, you may want to limit your search to starter homes. A starter home is a smaller, more affordable house you can buy. If you buy a starter home, you will have an easier time qualifying for the loan and affording the house.
If you have questions about first-time homebuyer programs, talk to a real estate agent in your area or a local lender like Cornerstone Residential Mortgage.