Buying a new home can be stressful, especially if you’re a first-time buyer. There are many things you need to consider before signing any contract. Choosing a new home can be expensive, thrilling, exciting and can be a roller coaster ride of physical and emotional stress
That’s why this article was made to help you navigate with the process of acquiring a new one, and can possibly help you to save more money in the long run. It’s a given fact that you’ll be going to spend a lot of money when purchasing a new house. And you want to make sure that the house you’re going to buy is the one that speaks to your character and so on.
Here are some tips about mortgage down payments and application tips for a first time home buyer like you.
Down payment Tips
- Start Saving Money for Down Payments
If you’re going to buy a new home, it’s common that you need to put at least 20% down. However, some lenders may allow a borrower especially if first-timers to pay at least 3% down. This will sound good options, but you need to look at the bigger picture. Paying for a low down payment will only mean that you need to pay for a higher monthly mortgage payment and that’s can be hefty.
So to prevent this from happening, start saving early, the bigger the savings the better.
- Explore Mortgage Options
Making a higher down payment will mean paying a much lower monthly mortgage payment. And if you want to pay the smallest mortgage as possible, you can choose for a 30-year mortgage payment options. But if you have a bigger budget, you can choose from 20-year or 15-year fixed loan.
However, paying a mortgage loan for a long time have a higher interest rate compared to a shorter one. But the good thing is, longer mortgage payment has the smallest amount to pay monthly.
Home Mortgage Application Tips
- Know How Much You Can Afford
Dreaming for a big new house is free, however, in reality, you need to choose a house that’s actually within your price range.
- Make Sure Your Credit Score Is Good
Your credit score will be the main factor to be approved for a mortgage loan. It’ll also determine your interest rate and loan terms.
Always check your credit score before jumping on the home-buying process. Maintain a clean credit history record and check if there’s a discrepancy in the record. Do not open any new credit accounts like an auto loan, personal loan, or credit cards until your mortgage loan is approved.
The Bottom Line
Setting your budget is very important in the process of buying a new one. If you have more budget in your pocket, buying a new house would be so easy. Always think carefully before signing any contracts and of course, do not rush things. Be prepared financially to avoid any financial mishaps and always check your credit score for a high chance of approval rate.
If you’re residing in the UK and planning to buy a new house, check out houses for sale telford for more info.