When you are a first time home buyer Arkansas all you can think about is all those immaculate houses you have seen in those glossy magazines. You may register yourself to various home buying apps and keep on scrolling through all the photographs of the houses available.
While the journey of being a first-time home buyer looks quite exciting, you must get all the necessary homework done as well. Making one wrong decision can cut your chances of landing the perfect house.
Here are 6 steps that you should take while buying your first home in Arkansas
Check Your Debit and Credit
You may not already own a house, but there are many other ways in which one can be in debt as well. Any student loans or auto loans that are not paid from your side present a bad credit score. The rule of thumb is that your debts should not exceed more than 36% of what you earn every month. This is why it is important to pay all your credit card loans and any other installments that are pending at your part.
Similarly, a great credit score means that you have a very high chance of getting a very low-interest rate. You should try working on your credit score when you decide that you need to buy a house. This gives you enough time to work it out. If the time is short, you can always get your credit limit increased. This will increase your credit score as well. Also, you should settle any disputes present in your credit score before you apply for buying a house.
Consider Your Budget
Your budget is very important when it comes to buying a house. Remember that you will not only be responsible for paying mortgages only, but you will have to pay additional taxes as well as you will become a homeowner. Plus, you need to have enough money in your bank that you can pay two months’ mortgages and the property tax as well. There is a high chance that you will see an increase in your monthly utility bills after buying a house. So, having enough money is extremely important so that your life does not suffer after having your own house.
Determine How Much Downpayment You Can Pay
The downpayment depends upon the type of mortgage you will be paying. Typically, a down payment ranges from 3.5% to 20%.
When you pay a 20% payment upfront, the seller develops trust and knows that you will be paying him the rest of the money as well. However, when you pay a lesser amount most of the lenders charge a PMI or a Private Mortgage Insurance so that their money remains safe.
Know What Kind of A House You Want
Most of the buyers are at a loss when it comes to deciding what kind of a house they want to live in. Whether you want a single-family house or a townhome, you should make a sensible decision keeping in view the size of your family and your budget.
Every type of house comes with a different cost. Sometimes there are certain neighborhoods where even single-family houses are extremely expensive. In such a scenario, consider looking for a house in some other neighborhood where you can get a condominium at the same price.
Know Where You Want To Live
Buying a house is a lot more than liking one place and purchasing it. While financial aspects are important, you should also know the kind of neighborhood you want to live in. Consider what kind of schools are there, if there are good parks nearby, how close or far it is from the main shopping areas, where is the nearest hospital and whether good and inexpensive grocery is easily available or not.
Compare Mortgage Rates From Different Lenders
Comparing mortgage rates can save you a lot of money. According to a study, home buyers who get mortgage quotes from five different lenders can save around $3000 when it comes to paying interest.
The above mentioned points are just 6 main things you should work on when you decide to buy a house. Remember that doing your homework is important as you do not get to buy a new house everyday.
