Buying a home for the first time is emotional. Simultaneously, it can be exciting, nerve-wracking, and intimidating! While the thought of buying your dream home conjures up rosy images, there’s a lot to think about to make your first home purchase successful and rewarding. From financing to making sure your new home is move-in ready, there are many aspects to homeownership that you’ll need to prepare for. If you are somewhere in the home buying process, even if you are just starting to search for properties in the area, contact the best loan officers Las Vegas for expert assistance. Additionally, here are some tips to get started on a rewarding homeownership experience.
1. Do a Cost-Benefit Analysis
Buying a dream home sounds appealing, even if the price tag is a bit more than what you want. Quite often, home buyers make a purchase without fully thinking through what they are getting into financially. Sure, beating other prospective buyers to secure your favorite house sounds great initially. But did you really take the time to think about other factors such as the location, proximity to your work, and factors that affect the property itself, such as the age and condition of the home, and if you foresee making renovations or additions?
2. Look at Your Credit
Before spending money on a home, you’ll want to look at your credit score and make sure it’s in the best shape possible. A good credit score is usually required, or at least preferred, for many significant financial transactions, such as buying a car or renting a property. Naturally, it’s also vital for purchasing a home! If you have a good credit score going into a home purchase, you can actually save money down the road. That’s because buyers who have a higher credit score are considered less of a risk to lenders.
While you may be able to qualify for certain loans with a lower credit score, which means you make a lower down payment, you will also be responsible for paying mortgage insurance. Mortgage insurance payments are added on to the cost of your monthly loan. Multiply those payments by 15 or 30 years, which is the average lifespan of a loan, and you may be dealing with significant added expenses. Lenders generally consider a score of 700 to be ideal. You may be able to get an FHA loan Las Vegas or another government-backed loan with a lower credit score, but keep in mind that you’ll pay insurance as a result.
3. Consider the Time
Similarly, prospective homebuyers don’t always think about the time associated with owning a home.
Again, renting a place means that you don’t have to worry about the upkeep and maintenance of the home or property. Those tasks that you might not otherwise think about, such as gardening, mowing the lawn, painting the house, and other common maintenance chores, can take quite a bit of time out of your weekend schedule. This might sound like a trivial point, but it ends up being a source of frustration for many new homeowners who are accustomed to saving time on the weekend for the fun activities they don’t get to do during the week.
4. Consider the Final Cost
Another reason many people jump to homeownership is that they think they’ll save money by owning a home rather than renting. This is especially true if rents are high in your location. But even if you qualify for mortgages Las Vegas with favorable interest rates, you may not experience significant cost savings, or even cost savings at all, by buying a home in the long run. If all goes well with your home, you may save some money each month. But what people don’t always consider is that when you rent a home or an apartment, someone else bears the expenses associated with home and property maintenance. When you own your home, you are responsible for repairing the leaking roof, water heater, appliances, maintaining the exterior, landscaping, and more. Any of these expenses can easily surpass monthly rent.
5. Save for a Down Payment
As with a car or any other major expense, buying a house is a significant financial investment. Therefore, the best loan officers Las Vegas highly recommend starting to plan (and save) early for a down payment. You can even work simultaneously on improving your credit score while you save money away for a down payment. As with a credit score, you can get some mortgages Las Vegas for a lower rate than 20%, which is the typical requirement for a down payment. But like having a lower credit score, making a lower down payment does not necessarily save as much money as it seems. You may also face higher interest rates and get less favorable loan rates than you would be making a higher down payment. Again, you’ll be considered a greater liability to lenders if you make a lower initial payment. However, if you can’t make a 20% down payment, it’s always better to make a payment based on what you can afford to avoid going underwater on your mortgage payment. After all, you can still make more substantial payments towards the principal if you feel comfortable.
6. Think About Your Loan
There are two types of loans available to homeowners: government-backed and conventional. Government agencies such as the Federal Housing Administration (FHA) offer loans to home buyers who have lower incomes or lower credit scores. In some cases, an FHA loan Las Vegas may initially be your only option based on your qualifications. An
FHA loan has more restrictions, but it may be more difficult to get a conventional loan or a reverse mortgage Las Vegas.
As you can see, there’s a lot to think about when buying a home. But we are here to help you out! No matter where you are in the home-buying process, be sure to contact us if you’re thinking of buying a home in the Las Vegas area. We are here to answer your questions and walk you through the process to ensure a positive experience.