While buying a house for the first time may be intimidating, no homeowner started the process feeling confident every step of the way.

Here’s what first-time homebuyers need to know.

Long before you start looking at houses, you must be sure your finances are in order. The process of saving and making strategic financial decisions to ensure your credit history is more appealing to a lender can take more than a couple months if you haven’t already been working toward buying a house.

Credit history. Run a credit report on yourself – which is free to do once a year and doesn’t affect your credit by going to annualcreditreport.com and receiving a report from each the three major credit-reporting agencies – and focus on the areas you can improve. You may have credit card balances to pay off, or a few missed student loan payments from a couple years ago. You may also simply need more time to pass from a recent borrowing mistake. The more time that passes from the last blemish on your credit report, the less likely a lender is to consider it a red flag to give you a loan.

How much house can you afford? How good your finances look from a mortgage lender’s perspective isn’t the only thing to examine. You should also look at savings that can be used toward a down payment and determine how much you’d be able to afford on a monthly basis for your principal mortgage payment, interest, taxes and insurance –  calculating as 28 percent of your gross income is a suggested “key” to knowing your ability to afford having your own home as suggested by many finance providers.

Savings for down-the-road expenses. Of course, you should also consider maintenance and other potential costs that may come up as a homeowner.

Who to consult. Once you’ve examined your financial history and expected future cash flow, it’s time to start talking to the professionals who will be able to help you throughout the process of buying a house. A natural start is with a real estate agent such as those at Swanson Real Estate.  Once you’ve found an agent you can trust, he or she can help you find a financial adviser if needed, a loan officer connected with a lender, real estate attorney, title insurance representative, home inspector and many more faces that will be part of your transaction.




Source:  U.S. News at https://realestate.usnews.com/real-estate/articles/the-guide-for-first-time-homebuyers