First-time home buyers venture into the real estate market every year. However, most of them make the same mistakes their friends, siblings, and parents made when looking for a home for sale in Calgary. Novice first-time property buyers can stop the cycle by avoiding these mistakes.
Affordability
First-time property buyers often waste time and money viewing and negotiating for a house they can’t afford. Some end up visiting properties that are below their optimal price level or viewing homes well outside their price range. Most first-time home buyers, their main goal is to find an affordable house and a loan with a comfortable repayment plan. New homebuyers can look online for a mortgage affordability calculator to determine what price range is affordable for them.
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Shopping for a home loan is like buying any other expensive item, such as a car. Home loan rates can vary from one lender to another, and so do discount points and closing costs. First-time homebuyers can save hundreds of dollars in interest by comparing different mortgage lenders.
Down Payment
First-time homebuyers no longer have to make a 20% down payment to acquire a property. Some mortgage programs allow first-time homebuyers to own a home with as little as 3.5% or zero down payment. That rate often seems attractive, but it can come with some strings attached. With a bigger down payment, first-time property buyers get a smaller mortgage, which translates to lower, affordable monthly payments. However, the downside of taking time to save for a down payment is that mortgage prices and value of homes keep rising. That said, a first-time home buyer can miss out on an opportunity to build equity as their property gains value, and it could become more challenging to acquire a home. The key is to make a down payment that will make your monthly payment more affordable.
Credit Reports
Lenders often scrutinize borrower’s credit reports before deciding to loan to them. A credit score with errors could translate to higher interest rates than you deserve. Examining your credit report for accuracy can increase your chances of qualifying for a loan. One way to ensure the accuracy of your credit score is to request a free credit report from credit bureaus. Requesting the report early enough provides you with an opportunity to dispute any error that you may find.
Buying your first home doesn’t have to be overwhelming. No one wants to apply for a loan that is more than they can afford, nor spend more than a property is worth. Not taking time to research and understand the home-buying process can lead a first-time property buyer to a deal that isn’t worthwhile.
