Top Financial Tips For First-Time Homebuyers
We’ve put together a helpful list of financial tips for homebuyers. This list was created with first-time homebuyers in mind, but the information could also be useful if you’re thinking about upgrading to your dream home. Here at Royal Credit Union, we have all the tools you need to write your happy ending in a new home!
Get Preapproved Before You Start Looking
Before you set your heart on a home that’s out of your price range, it’s a good idea to get a preapproval letter from a mortgage lender like Royal Credit Union. The preapproval process takes an in-depth look at your personal finances and verifies that you can likely afford a loan up to a stated amount. You’ll need to provide information like your tax return and income statements, but a preapproval will give you a better idea of how much house you can afford and show sellers that you are serious about buying. Most preapprovals from Royal Credit Union are good for 4 months, so you’ll have time to check out lots of homes.
Work With A Trusted Local Lender
Besides the buyer and seller, the lender has the most important role in the home buying process. That’s why it’s important to work with a trusted local lender like Royal Credit Union. Royal has a team of experienced professionals who can explain all the loan programs you may qualify for and provide personal service to answer any questions you might have. Although the digital age has made conducting business online increasingly popular, using a lender like Royal who is invested in your community and has a nearby office location will help ensure you have a positive experience. It also makes scheduling meetings and signing or returning papers much more convenient.
Pause Opening New Credit Accounts
Because your credit is checked during both the preapproval and final approval stages of buying a home, once you start the process you should avoid opening any new credit accounts which could affect your credit score and month-to-month finances. For example, if you take out an auto loan after getting preapproved, the details of the auto loan would need to be included on the final home loan application and it could ultimately affect your ability to qualify for the home loan.
Budget For Closing Costs
You won’t know the true amount due at closing until you receive your final disclosures a few days before signing the closing papers, but you need to have adequate cash available to cover the loan origination fee, home appraisal and other expenses related to the closing. Royal Credit Union works hard to keep closing costs low, but you’ll want to discuss estimated closing costs with your loan specialist so they don’t take your wallet by surprise.
Remember Move-In Expenses
After the closing is done and all the papers are signed, you’re sure to feel a sense of relief. But don’t forget that moving in will likely have costs that you’ll need to budget for as well. Even if you’re not hiring a moving company, you may discover that you need to purchase things like packing materials or cleaning supplies – or pizza and gas money for friends and family who help. Additionally, if you’re moving to a larger house, you could end up buying more furniture to fill the space so you can make the most of it.
We hope these financial tips for buying a home have been helpful. If you have any questions or are ready to take the next step in the home buying process, connect with our mortgage loan team or stop at any office!