7 Things You Should Know Before Purchasing Your First Home

Buying your first home can be quite a thrilling experience. You are so excited to own your dream home finally, but then again you feel overwhelmed by the whole process of finding, buying and finally moving into the house. Buying a new home should not be a difficult process.

Here are 7 things you need know before buying a new house.

Home Buying is a Process

Buying a new house is not a short process. It takes time to cover all the details in transferring ownership from the seller to the buyer. It takes around 30 to 45 days to buy a house completely.

You Need to Get Pre-qualified

When you are applying for a mortgage, you need to get pre-qualified. Pre-qualification helps in home buyers two ways. The first is you get to know the price of the house you want to buy and second is that it helps speed up the buying process. It's the work of your preferred mortgage lender to help you with the process of buying your home.

There are Several Types of Home Loans

Conventional loans. Before you can apply for this type of home loan, the lender requires a down payment of 5% of the total price of the house.

Government-sponsored loans. The government usually backs these loans, and the down payment requirements are low. The most common government-sponsored loans are VA loans and FHA loans.

There are bond programs available in several states which allow first-time homebuyers to get loans with a lower down-payment.

If you don't know how to go about these loans, you can ask your mortgage lender to help you.

The Seller will Pay the Buyer's Realtor

In a home buying scenario, the realtors will get 6% of the total price of the home. Typically, 3% goes to realtors while the other 3% is taken by the seller's agent. Buyers are not supposed to pay these costs. It's the realtor's responsibility to pay.

It's highly recommended to hire a realtor to help you buy your new home. They know the ins and outs of purchasing a home. If you want to buy a home in Florida, there are several Florida FSBO sellers with attractive prices. You can use a realtor to help you with the purchase.

Closing Costs

There are expenses involved in buying and selling a house. These are the transaction fees involved with the purchase of the house. Typically, the payments range from 2% to 5% of the total amount of the home. Closing costs are supposed to be paid before making any transactions. They are usually paid before the down payments.

Get a Mortgage Insurance

When you are applying for a conventional loan, you are required to get a mortgage insurance if you make a down payment of less than 20% of the house price. This insurance is there to cover the lender, in case you cancel your loan or delay payments. You can request your insurer to remove the insurance once you surpass the 20% limit.

There are other Payments Besides your Mortgage Loan

You are also supposed to pay the homeowners insurance, taxes, and mortgage insurance if necessary. All of these payments have to be paid together with the loan installments.

This information is enough to prepare you into an informed home buyer. In case you have questions that you need to be answered, you can contact your nearest mortgage lender, and he/she will help you.