Are you thinking of buying a home? According to the National Association of Realtors, 43% of all homebuyers in the United States are first-time buyers. So, what’s stopping you? Maybe you’re waiting for the perfect time or trying to save enough money for a down payment. But is there such a thing as the “perfect” time to buy a home? And how much money do you need saved up for a down payment? Below is a guide for first-time homebuyers to assist you in your decision-making process.
There’s No Perfect Time to Buy a Home
If you’re waiting for the perfect time to buy a home, you may be waiting forever. The truth is, there’s no “perfect” time to buy a house. The housing market is constantly changing, so there will always be ups and downs. Instead of trying to time the market, it’s better to focus on finding a home that you can afford and meets your needs. If you’re worried about rising interest rates, remember that you can always lock in a fixed-rate mortgage. This way, your monthly payments will stay the same even if interest rates go up.
You Don’t Need a 20% Down Payment
Another common misconception is that you need a 20% down payment to buy a home. While it’s true that having a 20% down payment will help you avoid paying private mortgage insurance (PMI), it’s not required. There are plenty of loan programs available that allow for smaller down payments, such as the FHA loan. With an FHA loan, you can put down as little as $500 if you have a credit score of 580 or higher. If you don’t have a lot of money saved up for a down payment, options are still available. You could look into grants or down payment assistance programs. You could also consider borrowing money from family or friends.
Get Pre-Approved for a Mortgage
If you’re serious about buying a home, you should get pre-approved for a mortgage. It will give you an idea of how much house you can afford and help you narrow your search. Getting pre-approved is a simple process that can be done online or in person at your local bank or credit union. Once you’ve been pre-approved, be sure to stay within your budget. Just because you’re approved for a certain loan amount doesn’t mean you spend that much. Remember, the goal is to find a home you can afford and meet your needs. Hopefully, this guide has helped you in your decision-making process.