When it comes to buying a home, the process is much more complicated than it is led on to be. In this guide, we hope to make things easier to comprehend and smooth the process for those buying for the first time.
Here are four tips first time buyers must learn before purchasing a home.
Set Realistic Guidelines
The fastest way to decide on how much you can afford on your new home is to determine the size of the mortgage payment. Will the payment fit well into your monthly budget? According to financial experts, your monthly cost should not reach more than 30% of your monthly income. This includes your mortgage payment, interest payment, insurance and property taxes.
Don’t Forget About All the Extra Expenses
When evaluating the monthly mortgage plan, it is important to remember the extra expenses that you will pay each month. Utility bills will increase once you move into a larger space than you once had. You will also need to pay for the entire moving process.
Consider Your Credit Rating
When applying for a mortgage, the lender will check your financial statements to determine if you will qualify for the loan. If you have a large outstanding debt to pay off or poor credit in general, this will affect your chances of getting approval for a mortgage.
Take A Look at Tax Advantages
Buyers will be allowed to reduce the interest of up $1 million of debt. You can also deduct the taxes on real estate you will pay on your house. Just be sure to consider the timing of the purchase. Homes that are purchased late in the year will have no tax deductions as home buyers are better off with the standard deduction.
Got any tips for the first-time buyers? Comment below and share your tips with us!