Nearly a third of all home buyers shopping today are looking to buy their very first house, and while the market is expected to be at least slightly less competitive in 2022, there’s still a lot for first time home buyers to learn and understand. After all, buying a home in Florida, whether it’s your first home or you’ve bought several, can be a difficult process. Looking for 2022 first time home buyer tips? Let’s take a look together.
Get a Better Understanding of the Financial Process
The most important of the 2022 first time home buyer tips you’ll want to know is to better understand the financial process of buying a home before you ever get started. Initially, you’ll want to ensure your finances are even ready for the process as a whole. You’ll need to apply for a mortgage to buy your home, and that means working with a lender to qualify for the loan. As you prepare to get a loan, don’t change jobs. Lenders are looking for stability going back for at least two years, and it’s easier to qualify if you have a predictable income. You’ll also want to have an emergency fund set aside to show a lender that you have an expense buffer should your new home need repairs.
You should also take any necessary steps to boost your credit score. Keep your credit card balances as low as possible and pay your bills on time. You want your credit score to be 740 or higher.
More than that, though, you’ll want to understand exactly how much you have on hand for your down payment and your closing costs. While the rule of thumb has always been to put 20 percent of the total amount of the loan down, there are loans you can obtain with a much smaller down payment. Closing costs are typically between two and six percent of the cost of a loan. Set aside the amount you need, then have it in your bank account for at least 60 days. Keep in mind that you’ll need to consider moving expenses as well. Often those can run between $2,000 and $5,000, depending on how far you’re moving.
As you work to prepare your finances, it may help to learn more about mortgages themselves. Conventional mortgages come in both fixed interest rate and adjustable interest rate varieties. Fixed interest rate mortgages give you a reliable rate on the money that you will repay over the life of the loan. Adjustable-rate mortgages often give you a lower interest rate, but it can fluctuate slightly throughout the life of your loan, so while you may have fairly low repayments for a few years, they could increase.
Those aren’t the only two kinds of mortgages, though. You can also borrow money from the Federal Housing Administration in an FHA loan, the USDA, or even the VA if you’re a veteran. The right loan for you may mean meeting with a local lender to discuss your options. Often they can help you understand more about the required downpayment for each loan type, the needed credit score, and the repayment costs involved. Every loan requires you to pay a number of things with each payment – a portion toward the principal, a portion toward the interest, property taxes, and insurance. If you don’t make a large enough down payment, you may also be required to pay private mortgage insurance.
Don’t hesitate to shop among lenders so you get the best possible mortgage rate and the lowest monthly payment possible. Once you find a rate you like, lock it in and begin house hunting after you’ve gotten preapproval from a lender.
Know What You Want Ahead of Time
The financial process of buying a home can be fairly long, but so can the process of defining your needs as a home buyer. You’ll want to think both about where you want the home to be and what you want within the home.
As you begin thinking about where you want your home to be, factor in a number of things. Think about your drive time to the office, your favorite restaurants, and even your children’s activities. Don’t just consider what side of town you want to be on, though. Think more specifically. Is there a neighborhood that works best for you? If you don’t have a specific place in mind, list out what you really want in an area before you begin to shop.
Location matters, but so does the home itself. You’ll want to consider both where you are now and what you might want in the future. If you haven’t yet started a family, do you plan to do so? If your kids are small, what kind of home would grow with you? Do you work from home? Do you plan to do so in the future? Think about bedrooms, family space, the kitchen, and the yard as you make a list of must-haves in your new home.
2022 First Time Home Buyer Tips: Understand the Timeline Involved
Once you start looking for a home, the process can move fairly quickly. Many homes on the market get three to four offers, so if you see something you like, don’t wait. You’ll need to make your offer quickly. Once your offer has been accepted, the home will need to be both appraised and inspected to ensure everything is as it should be. After that process is complete, you’ll just need to close on your new home!
With these 2022 first time home buyer tips, buying a house doesn’t have to be an intimidating process as long as you know what to expect, and 2022 is sure to bring plenty of properties that meet your needs!