Buying your first house can be incredibly intimidating and overwhelming. You will likely have many resources for tips and information, including family and friends and an array of resources online. However, when it comes down to it, what is the most essential information to know? Read on to find out.
- The price tag may not be what you actually pay.
There is often a lot of room for negotiation when it comes to buying a house. What you actually pay for a home can be much higher or much lower than the asking price. It may include more than just the house itself as well. The market, the condition of the home, and how motivated the seller may be will all play into your sale price.
You should also keep in mind that the price of the house is not the only thing you must consider when calculating your monthly payment. You must generally add insurance and property taxes to your mortgage payment. Of course, you must consider how much you will pay in interest as well.
In addition, you may end up adding the closing costs to your overall price as well. Closing costs are often in the thousands of dollars, and buyers usually end up footing the bill for that expense, but not always. According to Bankrate.com, the average closing cost in New Jersey is over $2,000.
- You can shop around for good mortgage rates.
Most homeowners will not pay for their house outright. This is especially true for first-time buyers. Instead, they will finance the purchase through a lending institution or other loan servicer. To get approved for a mortgage, you have to present a lot of information, including things like:
- Bank account statements
- Tax returns for the past two years
- Pay stubs
- Statement from current loans
- Landlord information
Your lender wants to make sure that you are a good investment. However, you can also shop around for mortgage rates as well. Finding the lowest rate can help you save thousands of dollars over the next several years. Just like the lender is vetting you, you can also research or investigate various lenders as well. You definitely do not have to go with the first lender that approves you.
- You may not need a down payment.
You may have heard that you must have at least 20% of the money for the house before you buy. While this is certainly good practice, you may not need that type of money to purchase your first home. Instead, you may qualify for specific types of loans that encourage first-time homebuyers by requiring lower down payments or no down payment at all. For example, loans through the Federal Housing Administration (FHA) only require a 3.5% down payment in many circumstances.
As a first-time homebuyer, it is a good idea to learn everything you can about the process, what your payments will look like, and your expectations. The legal portion can be particularly challenging to navigate, but that’s what we’re here for. For experienced help in New Jersey real estate law, contact the experienced team at Matus Law Group today for more information.