Top Ten Home Buying Tips For First Time Buyers

If you are thinking about buying your first home, there is a lot to consider. Where you want to live, what style home you want, how much you can afford, how big you want your home to be and so much more. While it is a very exciting time in your life, it is also a time when you will make one of the most important financial decisions in your life. Buying a home is simply life changing and you will want to make sure you get it right. For the first time home buyer here are ten great home loan tips you will want to follow when purchasing your first home.

1) Make Sure Your Credit Is In Order

Before you even think about applying for a home loan you need to make sure your credit history is in great standings. If you need to clean up your credit, start doing so long before you are ready to purchase. Pay down your debts, make sure you make your payments on time and stop making big credit purchases that will raise your debt to income ratio. If you want to secure the best interest rates you need your credit history to be clean and your debt to income ratio to be low.

2) Start Saving Early

When you are ready to buy a home, you will want to have a sizeable down payment. The more money you have to put down, the more money you will be able to save. A minimum 20% down payment is recommended. Having a 20% or more down payment will allow you to skip paying mortgage protection insurance and will give you the most competitive interest rates available.

3) Don’t Buy A Home You Can’t Afford

One of the biggest mistakes first time home buyers make is buying a home that they really cannot afford. This can lead to financial distress. Carefully consider your budget making sure you leave plenty of room in it for other new home expenses. It is better to spend even a little less than you think you can afford.

4) Understand All The Expenses Involved

Purchasing a home has numerous fees and expenses that you need to consider. Your home loan is just part of it. You also need to factor in stamp duty fees, application fees, mortgage insurance premiums and more.

5) Carefully Decide What Type Of Home Loan Is Best For You

There are numerous home loan options available and you will want to make sure you pick a package that will work for you. An online mortgage calculator is a good option to help you find a suitable home loan. You will need to decide if a variable, fixed or mixed rate mortgage is best. You will also want to consider what benefit and features you will want to have included in your home loan package.

6) Consider A Honeymoon Interest Loan

First time home buyers often qualify for a honeymoon interest rate mortgage. These home loans give first time home buyers a low interest rate during the first year of the loan. For many first time buyers this is a perfect loan choice as it frees up additional funds to help pay for all the other things that go into home ownership.

7) Consider Using a Home Loan Comparison Site

A great way to compare multiple loan packages is to use a home loan comparison website. When choosing a home loan you want to compare multiple offers before making a decisions and using a home loan comparison website is a great way to do that.

8) Find Out If You Qualify For An Assistance Program

Many first time home buyers qualify for home loan assistance. This is something you will certainly want to cash in on if possible.

9) Never Sign On The Bottom Line Until You Have Carefully Read Your Contract

A common mistake that many first time home buyers make is not reading the fine print on their home loan contract. You certainly don’t want any surprises later on so make sure you read your contract carefully and ask if you don’t understand all the terms and conditions.

10) Try Not To Stress Too Much

Finally, while it is important to take your time and carefully consider every step along the way to home ownership try not to stress about it too much. Make sure you take a bit of time to enjoy it and before you know it you will be living in your new home.

This article was written by Tomorrow Finance – home loan comparison experts. You can view their mortgage calculator on their website www.tomorrowfinance.com.au