As first time home buyer it is important you follow the tips below in order to prepare to find and purchase a home you can afford. The purchase of a home is the biggest financial commitment most of us will ever make. In order to make a solid decision it is crucial that you have a detailed understanding of the market. This will help you to make an educated decision as well as help you save money and avoid any unnecessary frustrations.

The home buying process is one that can be enjoyable and relatively free of stress. Buying your first home is exiting and the process is thrilling. It is especially pleasant when you understand the real estate process and have an agent working with you that has a lot of experience with first time home buyers.

Before you can start looking or purchase a home you need to have an understanding of how much you can afford. The biggest mistake first time home buyers make is not taking into consideration the true cost of owning a home. The cost of owning a home doesn’t end with the mortgage payment. You need to consider the additional mortgage fees, taxes, insurance and utility fee increases to determine an actual amount of money that will be needed per month to own your new home. A new home buyer can quickly deplete their savings when not taking into consideration these extras.

Another priority for first time home buyers is to calculate the required down payment amount. Long gone are the days of no money down home loans. Mortgage lenders require ten to twenty percent of the purchase price down on a home. Without this you will end up paying a substantial fee monthly for mortgage insurance.

In order to get the best possible interest rate on your home loan you need to have a sufficient credit rating. If your credit rating is less than perfect take a year to clean it up and get your financial house in order before looking deeper into buying a home. To obtain the lowest mortgage interest rate your financial house must be in order. A high credit score, a decent down payment and an affordable home will ensure you don’t take on a payment that you can’t afford.

Most real estate agents will not show you house until you have been pre approved. Without pre approval most sellers won’t take the time to even consider your offer. A quick way to determine how much you can afford is multiply your total household income by three. For instance, if you make fifty thousand dollars a year your home should cost no more than one hundred and fifty thousand dollars. With a minimum down payment of ten percent you should consider having at least fifteen thousand dollars saved.

Being prepared as a first time home is key. With a bit of industry knowledge, help from an experienced real estate agent and a bit of luck you are only a few steps away from owning your first home.

Lady of the Lakes Real Estate is Livingston County’s premiere realtor; out of Pinckney, Michigan helping buyers buy and sellers sell homes that provide a recreational lifestyle including golf courses, lakes and the Huron river chain of lakes, throughout Brighton, Howell, Pinckney and the surrounding area. Find us at