27 Jul 4 Tips for First-Time Homebuyers
Our team at City Creek Mortgage understands all the excitement and optimism that comes with buying a home for the first time. With a good support team in place, this decision can be one of the most rewarding you’ll ever make.
Our City Creek Mortgage team is here to make this process informative, transparent, and confidence-building. We work with you to find the perfect mortgage for this big first step! Knowing this basic information will give you some things to think about before signing on the dotted line.
Knowledge is power.
Don’t be afraid of your financials. Dig in. Learn all you can. In most cases, any blemishes on your financial history can be made right with time and patience.
Your first step is to review your credit report. Both your credit score and the report will help determine the interest rate you’re eligible for. You guessed it: you want a lower interest rate so that you’ll ultimately pay less for your home over the life of your loan.
The overall credit score is essential; however, lenders look at your report, too. The credit report will show your payment habits, balances, and overall financial health.
Adjust your habits to improve your credit score. If there are errors on your report, alert the credit bureau as soon as possible.
Budgets are your buddy.
In general, the rule of thumb is that if you are debt-free, you are sitting in a perfect position with lots of flexibility on how much home you can afford. Usually, if you’re debt-free, you can consider houses up to five times your household income.
If less than 20% of your income goes to pay down debt, you can usually consider houses no more than four times your income.
If more than 20% of your monthly income goes to pay down existing debt, you may need to shop for houses only three times your income or less.
If these estimates don’t delight you, you may want to consider paying down your existing debt to expand your options.
Common sense is key.
Use good common sense when thinking about your home purchase. Buying a home can be an emotional decision. The more emotion you can remove from the actual purchase, the better. Try and think practically about what this purchase can do to elevate your financial status. It’s an investment!
Think about how much space you can maintain with your current schedule. How much room do you want versus how much you may need? Do you plan to expand your family once you get settled? Do you have pets that require a fenced-in yard?
Be sure to vet the neighborhood where the house you like is located. How are the schools? Are there grocery stores, doctor’s offices, veterinarians, and daycare facilities located nearby?
Don’t get “married” to property without thinking through all your options. Using common sense now will pay off later!
It’s not just the price of the house.
Don’t empty your cash reserves to purchase a home. Not only do you need cash on hand for potential unexpected emergencies, but you need to know your home’s purchase price is just the beginning.
There are lots of costs that some homebuyers don’t consider when thinking about when buying a home. Property taxes, closing costs, homeowners insurance, moving costs, even utilities will need to be factored into your buying budget.
If you think you’d feel more secure with more money set aside, it’s always better to wait until you are at ease. Don’t try to make a home purchase that’s going to stress you out unnecessarily. Take the time to save your money and build your nest egg.
In the long term, having the extra cash set aside will make buying a house less stressful and more rewarding, especially if an emergency arises during or right after the home-buying process.
The City Creek Difference
City Creek Mortgage isn’t your typical mortgage company. Our small, family-owned, local business is a family to our employees and a safe place for our clients to make big decisions.
From the very beginning in 1998, owners Mike and Tobi Roberts set out to provide a mortgage company that did right by their clients, took personal responsibility for their company, and provided quality service and an excellent product.
For Mike and Tobi, it’s always been personal. Not only do they care about their clients, they care about their employees. When you work with us, you will notice a difference from the very beginning of your mortgage process. We want to be the most trusted, respected, and loved mortgage company in Utah.