What All New Homebuyer Should Know

The anticipation of claiming your stake in the American Dream should be a proud moment. Being a first time homebuyer has immense benefits but can often be a little intimidating if you are just starting out. Here are a few things to consider:

Save Your Pennies
When you are trying to buy a home you have to have money saved. There are three major financial components to buying a home: earnest money, the down payment, and closing costs. Your earnest money is to let the seller know you are serious about the purchase and usually varies from $500 to $1000. Your down payment is an amount based upon the type of loan you secure, usually 1%-10% of the total loan amount. Closing costs are the fees associated with processing your loan and they usually can run anywhere from $500 to $3000 or more due at closing time.

Look for Special Programs
If you are a single parent, have a low income home, or just have an immature credit profile there are many lending programs that cater to those situations. Most helpful are government funded loans like FHA loans which monitor the amount of down payment needed and fees that can be collected at closing. These loans also take a more lax look at your credit report offering more opportunities for diverse situations.

With all of the excitement of your home purchase make sure you understand what you agree to. Don’t be afraid to ask questions and don’t let a lender or real estate agent push you into a loan amount you aren’t comfortable with. Have fun, be discerning and you visualize yourself in your new home.

By : ABC Loan Guide