Your home is the largest purchase you’re likely to ever make in your life. It’s understandable, then, that you might get a bit nervous about it, especially when you’re a first-time buyer. There’s a lot of information and paperwork to keep track of, not to mention the sticker shock you’re going to feel after signing and initializing all of the paperwork at your closing.
If you’re a first-time home buyer looking through real estate for sale in Alpine, TX, here are a few tips to keep in mind that will help you stay sane and confident in your purchase.
Seriously think about what you can really afford
There are far too many people who get wrapped up in finding their “dream house” that they don’t spend nearly enough time considering how much they can actually afford to spend on their home.
First, is it even the right time for you to be shopping for a home? Will you be living there for at least five years? Will your total housing payment for the home you’re looking at be less than 30 percent of your gross monthly income? You don’t want it to be difficult to cover other monthly expenses because you’re shelling out the bulk of your income to pay for a mortgage on a house you can’t comfortably afford.
Get your finances in order
Once you’ve determined you can afford a particular house, it’s important to make sure you’re financially qualified. Check your credit score first—you need to have a good credit rating to not only get approved by lenders, but also to get a good interest rate. If you need to boost your credit score, pay off your credit card balances and continue making timely monthly payments, and it will take care of itself over time.
Make sure you’re also saving up for a reasonable-sized down payment. You don’t necessarily have to put the commonly recommended 20 percent down, but just be prepared to pay for private mortgage insurance if you do put down less than that.
Finally, make sure you’ve got all your documents ready to provide to a lender as soon as possible so you can get pre-approved quickly for a mortgage. These documents include W-2s, pay stubs, bank statements and copies of your most recent several years of tax returns.
Find a lender
Shop around to several different banks and lenders to find one that will give you the best interest rate. It’s free to get pre-approved for a mortgage, and doing so shows you are a serious buyer who can be trusted. Consider whether you want a fixed-rate or adjustable-rate mortgage (most buyers should take out fixed-rate mortgages). Consider other mortgage fees that you might need to take into consideration, as well as PMI.
Don’t just accept whatever interest rate is provided to you in your first conversation with a loan officer. Spend a bit of time shopping around to see what you can get. The good news is that interest rates are still quite low at the moment, so you should be able to find a rate that is beneficial for you.