Common Questions for First-Time Home Buyers
June 30, 2020
First-time home buyers may think that buying a pre-owned home is an easier and more affordable choice, but the reality is that a new home for new homebuyers can potentially be a better choice. After all, a new home will have fewer issues in the months and years to come, giving you time to adjust to homeownership and save some money in the process. As a new home builder in Portland, we offer a variety of move-in-ready homes that are particularly ideal for first-time buyers. We’re happy to work with you and answer your questions to ensure you find just the right home. Here are some of the frequently asked questions to help you get started.
How much can I afford?
That’s probably the biggest and most important question to ask. Fortunately, there are a variety of online mortgage calculators that help you better understand exactly how much you can afford. After all, you don’t want the cost of your home to ruin the pleasure of being a homeowner. These calculators will factor in principle, interest, property taxes, home owner association fees, personal mortgage interest, home owners insurance, and other factors to help you get a better sense of just how much you can afford to pay each month.
How do I get a mortgage?
If you’re serious about buying a home, it’s a good idea to get pre-approval from a mortgage lender. You will go through the bulk of the approval process so that when you start looking at homes, you can confidently make an offer based on the knowledge of how much a lender is willing to provide. Contact a variety of mortgage lenders to find your best option. Typically, lenders are looking at your employment history, your credit score, your debt-to-income ratio, and your downpayment amount. Before starting the process of buying a home, it’s a good idea to make sure your credit score is healthy and that you don’t take on new debt.
What type of loan should I get?
Typically homebuyers are looking at fixed-rate and adjustable-rate mortgages for 15 or 30 years. Ultimately, it’s up to you, as each has its pros and cons, depending on your plans. For example, with interest rates being so low right now, you may want to choose the fixed-rate mortgage and lock in these low rates, rather than risk rates going up if you choose an adjustable-rate mortgage. However, an adjustable-rate mortgage can sometimes be lower than a fixed-rate mortgage. If you’re only planning on being in the home for a few years, you may still be able to take advantage of some lower rates. Just be sure to do your research.
As for 15- and 30-year mortgages, which are the most common time frames, it depends on what is better for you in terms of repayment and what your long-term plans may be. While the 15-year mortgages often have lower interest rates than 30-year mortgages, the monthly payments are usually higher than 30-year mortgages, since you have half the time to pay. If you have a solid job and a good downpayment, you could pay off more of your home faster with a 15-year mortgage, potentially earning you more when you decide to resell. However, if you want to give yourself some breathing room on monthly payment amounts, a 30-year mortgage may suit you better.
How much should I put down?
Downpayments ideally should be around 20% of the home’s cost. The more you can put down, the lower your mortgage payments and the faster you can pay off your home if you choose. However, 20% isn’t always an option, especially for first-time homebuyers. If you’re unable to put down that much, you likely need to get private mortgage insurance at the lender’s insistence. This protects the lender should you default on your loan payments.
These are some of the aspects of purchasing a home that first-time buyers need to investigate. There’s no single answer as each buyer is different. Research, check with multiple lenders, and get a clear understanding of what your options are and how they fit into your current lifestyle and budget, as well as where you see yourself in coming years. Also, remember than when you choose a new home builder in Portland, you’re getting a brand new home with a warranty, better energy efficiency than older homes, and homes that are less likely to surprise you with expensive costs in the near future. If you’re ready to purchase your first home, explore the variety of home designs and move-in-ready homes we offer and let us help you take the wonderful step toward homeownership.Tags: homebuilder in portland or, homes for sale portland or, new homes for sale in portland or
This post was written by Pacific Lifestyle Homes