Home buying is a significant decision involving huge investment. Therefore, it is important that you do the necessary ground work and make informed decisions all the way while looking for houses for sale in San Miguel De Allende. Especially if you are a first time homebuyer, you need to make sure you know the following tips to land on successful deals and also avoid several problems that might come up on the way.
Start saving money for making the down payment
Most investors advise you to save around 20% for the down payment. In fact, it is possible to work with money lenders who will be willing to accept a significantly lower down payment. You will be surprised to know that most first time home buyer loans can offer as little as 3 percent down payment. However, you must always remember that by paying less down payment, you are going to land on higher private mortgage insurance and other costs. To arrive at an affordable down payment that works in your favor, use a down payment calculator. It is good to start saving early to make the down payment.
Create an emergency fund and clear all debts
Owning a home is not a simple venture. Upon the purchase of the home, you will also be responsible for the maintenance and upkeep of the home. If you purchase older homes, these costs can add up significantly. Before deciding to buy your first home, ensure to create an emergency fund to take care of your fundamental expenses for around six months. It is also necessary to pay off majority of your debts. While committing to a home buyer’s mortgage payment, you must proceed comfortably and ably backed by an emergency fund so that you do not incur any significant amount of debt.
Study the different down payment and mortgage options
There are several mortgage options and each of them has its own merits and demerits. While buying your first home, you will face conventional mortgages. In such cases, your mortgage payments payable month on month and the interest rates will depend on the down payment. The optimal way of ensuring that you will have the least possible rate of mortgage payment is to opt for 30 years fixed mortgage loan.
Decide what is affordable to you
Before deciding on a property, it is necessary to set a budget. Before looking at the listings on the market, you must first ascertain how much house is affordable to you. You must also focus on the budget line items like insurance, HOA fees, and other recurring monthly costs. To make these determinations, a mortgage calculator will help you.
Research the different governmental assistance programs
There are several state and federal sponsored programs available to help homebuyers. First time home buyer’s grant and first time farm buyer’s grant are some areas you can explore. There are also some assistance programs available with down payments and closing costs. You can also take advantage of tax credits and interest rates. Look for first time home buyer programs and make the best use of the provisions they provide.