Most people struggle when making a large purchase like a home, not only because of the legal requirements but also because of the financial commitment.
Here are a few tips that are helpful when beginning the homebuying process, especially for first-time homebuyers.
#1 Know Your Price Range
One of the biggest mistakes that homeowners make is choosing a home that is beyond their price range. Remember that you’ll be paying for a home for a long time. A crushing house payment could be difficult to manage.
In order to find a reasonable mortgage, you need to look at the numbers. I can help you analyze your income and debt, and the current mortgage rate to determine an acceptable amount when purchasing a home. But beyond that, examine your personal budget that includes all your expenses, and thoughtfully determine how much you can spend on a mortgage payment.
#2 Choose A Shorter Term Mortgage
When budgeting for a home purchase, also consider various payment terms. 25 – 30 years is the typical term for most mortgages, but the sooner the mortgage is paid, the more money you’ll save in the long run.
If possible, choose a shorter term mortgage, and you’ll save a lot of money.
#3 Make Extra Payments When Possible
Once you have your new home, consider paying it off by making extra payments. While this may seem like a challenge, it can be accomplished with careful budgeting.
Making one extra mortgage payment a year will shorten the length of the loan, build equity more quickly, and reduce the total amount of interest you’ll pay.