Mortgage Rates in the High Country of North Carolina are at an all-time low right now, so many people are considering buying their first home. If you are a first time home owner in the market for purchasing your own house, here are the first steps for your buying process.
Step #1: Start Saving For…
Your Down Payment
Since you’ve been staying home more because of COVID-19, you’ve had more time to save your money for a house. Your down payment requirement will depend on the type of mortgage you choose and the lender. Some conventional loans aimed at first-time home buyers with excellent credit allow as little as 3% down. But even a small down payment can be challenging to save. For example, a 3% down payment on a $300,000 home is $9,000. Use a down payment calculator to decide a goal, and then set up automatic transfers from checking to savings to get started.
Your Closing Costs
Closing costs are the fees and expenses you pay to finalize your mortgage, and they typically range from 2% to 5% of the loan amount. You can ask the seller to pay a portion of your closing costs, and you can save on some expenses, such as home inspections, by shopping around.
Your Move-in Expenses
You’ll need some cash after the home purchase. Set some money aside for immediate home repairs (you’ll never know when your home will need a septic tank repair, or some well maintenance), upgrades and furnishings.
Step #2: Choose Your Mortgage
A variety of mortgages are available with varying down payment and eligibility requirements. Conventional mortgages are not guaranteed by the government. Some conventional loans targeted at first-time buyers require as little as 3% down. FHA loans are insured by the Federal Housing Administration and allow down payments as low as 3.5%. USDA loans are guaranteed by the U.S. Department of Agriculture. They are for rural home buyers and usually require no down payment. VA loans are guaranteed by the Department of Veterans Affairs. They are for current and veteran military service members and usually require no down payment.
Step #3: Choose Your Real Estate Agent
A good real estate agent will scour the market for homes that meet your needs and guide you through the negotiation, due diligence, and closing process. Get agent referrals from other recent home buyers. When speaking with potential agents, ask about their experience helping first-time home buyers in your market and how they plan to help you find a home.
Feel free to contact 828 Real Estate, we would love to help you get started in the home buying journey. Fill out our contact form below or call us at (828)-386-6047.