4 Financial Tips for First-Time Homeowners
Are you considering buying your first home? You likely have questions about the costs involved with homeownership. Here are some helpful financial tips.
There are plenty of beautiful homes in Arizona that are perfect for first-time homeowners. When you’re about to embark on a new journey, it’s natural to have questions about costs. Here are some financial tips to help make the journey easier to navigate.
Determine Your Budget
Even with the help of a mortgage, an important financial tip for first-time homeowners is determining how much they feel comfortable spending. Plan on saving some money for your down payment, as this will be a major expense.
Depending on what kind of mortgage you receive, your down payment can be anywhere from 3 to 20 percent of the cost of your new home. To figure out this number, you can try using down payment calculators online. That will give you some idea of what to expect.
Besides the down payment, you should also keep in mind other factors that will affect your budget, including:
- Property taxes
- Moving costs
- Closing fees
- HOA fees
Familiarize Yourself With HOAs
First-time homeowners who lived in apartments may neglect to think that their new neighborhood may come with unexpected fees. It’s important to learn about homeowner association essentials beforehand.
Also known as HOAs, these organizations set certain rules to enforce community standards. They also charge fees in exchange for providing you with services, such as maintaining the landscaping of your neighborhood. This monthly cost can also impact how much money you receive for your mortgage.
Because HOA fees vary, pay attention to them when shopping for your new home. You will likely see the cost of most HOAs on online real estate listings.
Applying for a Mortgage
Your mortgage is a big determining factor in what kind of house you can afford. Before you even start shopping for a home, try getting preapproved, as this will give you a clearer picture of your financial situation. It will also give you a better chance of closing on your desired home, as this position helps sellers take you seriously.
To set yourself up for success, research the dos and don’ts of applying for a mortgage. Essentially, establishing stability is important, so you should make efforts to improve your credit score. This factor will show lenders your successful history of paying back creditors.
It’s also wise to get multiple mortgage quotes, even though it can be tempting to stick with the first one you receive. You can save more money by comparing what’s out there.
Assess Your Family’s Needs
Lastly, consider what you want out of a home. If it’s only you and your partner, you likely would not need as large of a home as someone with children. You could save money by buying a townhome, condominium, or a duplex.
However, if you want plenty of space for a growing family, you would likely choose a single-family home. While this type of housing can be more costly, they generally come with more space and privacy than the other options.
We wish you nothing but the best in finding your new home! With a little know-how, you’re bound to find a home you can afford.