Tips for Buying Your First Home in Columbus
Buying a first home in Columbus is exciting, it can also feel overwhelming and could lead to home-buying mistakes if you do not make sure you do your homework first. The more you know about the real estate purchase process the better. Even seasoned buyers are learning new things about home purchases every time, as the market changes. Just like researching a car or a vacuum cleaner, you want to make sure you know as much as you can about purchasing a home to ensure you are spending your money well.
Tips for Buying a First Home in Columbus
Sit Down and Plan Out Your Budget
Talking with a mortgage professional is a smart plan, but you also want to crunch the numbers on your own to determine what you truly can comfortably afford to pay for a home. Most financial experts will advise that you do not spend more than 1/3 of your take-home income on housing costs (including maintenance, utilities, and more). This will enable you to pay for other bills, save for a vacation, build a savings account, and spend some money on something fun once in a while.
A mortgage professional may approve you for a loan amount where the payments would accumulate to more than a third of your income when you factor in other housing costs.
Hold Off On Financing Other Purchases
If you plan to mortgage your home purchase you want to hold off on any other large purchases that you would need to take out a loan for purchase. Adding to your debt-to-income ratio could result in the denial of your mortgage loan approval. The less debt you have the better your debt-to-income ratio and the better your chances of mortgage approval.
Go Over Your Credit Report
Your credit score is another big determining factor in mortgage approval. It is a good idea to pull up a free copy of your credit report and make sure all of the items on it are accurate. It is not uncommon for someone to have something that was reported in error that negatively impacts their credit score. If you find some misinformation you can request the creditor that reported to fix it so that your credit score is as high as possible. The higher your credit score, the better your mortgage interest rate will be.
Make Plans for a Down Payment
The traditional down payment on a home purchase is 20%. But there are many loan programs that do not require a 20% down payment. Look at all your options to determine what is best for you personally. Financial experts do advise that you put as much money down as you can comfortably afford because it can save you money on interest. And a 20% down payment eliminates the requirement to pay for mortgage insurance.
Consider What You Really Need in a Home
When you are searching for a home, it is good to narrow down to exactly what you are looking for. Make a list of what you want in your first home. Categorize this list by wants and needs. Make sure to be realistic about what you truly need in a house and what you want in a house. This will help you to stay within a realistic budget and home search for your very first Columbus home.
Don't Forget About Closing Costs
Closing costs are charges that will be added to your home purchase for the processing of your loan. It is not uncommon for closing costs to catch first-time buyers off guard. They can be anywhere between 2 and 6% of the total home cost.
Be Aware of Property Taxes
Property taxes are part of every real estate purchase. They are often worked into mortgage payments, but it is good to realize they will raise the cost of your home. It is also good to know that property taxes can increase depending on the local tax rate and any voted-on increases. As your property value increases your tax rate will also increase. You want to make sure you can afford these potential increases.
Plan to Pay for Maintenance
It is not uncommon when thinking about the cost of purchasing a home to forget about the cost of maintaining the home. Many people get caught up in the purchase price and legally taking ownership of the home. But once the home is yours you are the one responsible to keep the home in good standing. The better you take care of your investment the better it will retain its value.
Hire the Right Help
Make sure to have an expert local agent on your side. Purchasing your first home and every home after that should always be done with the help of a professional. The right buyer's agent will help you to find a home you love at a price you can afford and help you to negotiate the best purchase terms. They are your expert insight into the real estate world.
For information on purchasing your first home in Columbus contact me anytime. I have helped many first-time buyers purchase Columbus homes.