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First Time Home Buyer: Ways To Be Financially Ready To Buy a Home

First Time Home Buyer, A Helpful ListBuying a first home can be a scary yet exhilarating endeavor. The purchase of a home is not only a commitment in time and energy, but financial resources as well: saving for a down payment is just the beginning. Here are a few tips to get first-time home buyers started in the right direction.

 

Know what you really spend each month

 

Most people think they know where their money goes each month, but estimates are usually further off than expected. Sit down and comb through your bank statements; pay close attention to your actual spending habits. One can never be over-prepared financially when it’s time to commit to a home.

 

Save Save Save

 

Once you know where your money is going and how much remains each month, save as much as possible toward your home purchase. While there are home loans that allow for a smaller down payment, investing as much as you can into your new house will start you off on the right foot when building equity and will help you secure a lower interest rate for Utah Mortgages.

 

Know Every Fee

 

A down payment may be the largest expense for which you’ll be saving, but it will be one of many. Use a mortgage calculator to run various numbers to understand the true, final cost of your monthly mortgage payments. You’ll now be responsible for home insurance and annual property tax, and you’ll also be required to pay private mortgage insurance (PMI) if you have a down payment of less than 20%. These additional fees can add up quickly and cause your initial monthly payment to jump quite a bit. Know what you’ll be responsible for paying each month so you can determine exactly what your budget will allow.

 

Create an Emergency Fund

 

Now that you’re moving from renting to buying, there will be no safety net when it comes to repairs or maintenance–it’s on you! Hail damage from a storm, a leaky pipe, or any other unexpected issue can put quite the vise on your budget. Start building an emergency fund immediately so that when these inevitable aspects of home ownership crop up, you’ll be prepared to handle anything that comes your way.

It can be scary to take on such a large commitment, but research and knowledge will prepare you for one of the best rides of your life.

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