Budgeting Tips for First Time Home Buyers

First time home buyers often don’t realize the role that budgeting plays in purchasing and maintaining a home. In addition to mortgage payments, home owners need to budget for such expenses as home maintenance, homeowner’s insurance, monthly utilities, lawn care, home taxes and more. Before considering a home purchase, buyers should evaluate their finances to see if they are capable of handling the expense of home ownership. The following budgeting tips can help make it easier for newcomers to enter the home buying market.\r\n

Analyze Finances

\r\nThe lure of affordable homes in Chester County can be quite a temptation for consumers contemplating a home of their own. By going slow, however, buyers can make better home choices. The first step in home buying is for consumers to analyze their finances to see if they can afford home ownership. Paying off debts before buying gives consumers more money to invest in their property. Fewer debts will also qualify them for lower interest rates on the home they want to buy.\r\n

Choose a Mortgage Company

\r\nNext, home buyers should shop around for a mortgage company to finance their home and get pre-qualified for a loan. Buyers should compare what various local mortgage companies have to offer to ensure they’re getting the best deal. It pays to work with a reputable lender as buyers will have greater confidence in getting quality services for the long haul.\r\nGetting pre-qualified for a loan gives buyers greater insight into how much they can spend on a home. Lenders will often break down this figure into monthly payments to help buyers decide what they’re comfortable paying.\r\n

Save Up for a Down Payment

\r\nThe higher down payment buyers can put on a home, the less they have to borrow. A minimum of 20% is recommended in order to avoid having to pay private mortgage insurance. If possible, buyers should put down more to reduce monthly mortgage costs. Ideally, buyers should have cash reserves on hand in addition to a down payment before purchasing a home. Extra funds are always needed for moving, buying furniture, setting up utilities, etc.\r\n\r\nThe key to smart home buying is purchasing a home within a buyer’s income. Otherwise, it can be difficult for people to keep up with their monthly payments. By perusing developments in Chester County with homes within their price range, buyers are sure to find a home to their liking within a price they can readily afford.