What tips should people looking to buy their first home take?
1. Choose a payment plan; higher down payments usually mean lower interest rates.
2. Get your credit score on or above 700.
3. Don’t open a new credit account before getting a loan for a home.
4. Look for first-time buyer programs and local assistance programs.
5. Be informed of closing costs and terms.
6. Understand that there are most costs after purchasing the property for furnishing, renovations, etc.
7. Research about the different types of mortgage.
8. Get and compare at least 3 good loan offers.
9. Decide if you need points for your loan.
Before you go and get your dream townhouse in New Manila, there are a few things you need to know. After all, buying a house is a big decision that should be taken into proper consideration. Plus, you would want to be properly informed about certain things you could be facing head on in the near future.
To assist you – particularly if this is your first time purchasing a property – here are a few tips that you could follow in order to secure that New Manila townhouse.
Choose a Payment Plan
When choosing a payment plan, keep in mind that you couldselect to pay either a big down payment or a small one. The former is usually found in mortgage plans, wherein you would have to pay 20% of the worth of the house.You couldalso get down payment for less, but you may need to pay higher monthly dues and even mortgage insurance that could cost you more in the long-run.
Check Your Credit
This cannot be emphasized enough because of how important it is to your financial. Not only will it dictate if your loan gets approved or not, but also the interest rate and terms, which means that you must ensure to get a high credit score.
If there’s anything bringing it down, then fix them and find all the ways to bring it up. Your goal is to get a credit score of at least 700.
Don’t Open a New Credit Account
Whenever you open a new credit account, the lender will firstly investigate you. This means that it isn’t advisable for you to take a loan right before you plan on making a house loan.
First-Time Buyer Programs
There are many first-time buyer programs, which are perfect for those struggling to find money for a down payment. The down payment in these programs can be as low as 3% of the total worth of the house. It’s an attractive deal that can get you your dream townhouse in New Manila right way.
Also, you could consider either crowdfunding or asking your family members for help if you’re struggling with the down payment.
Look for State and Local Assistance
Assistance programs could be offered locally through government agencies (e.g. Pag-IBIG). Some companies also offer them to their employees as part of their benefits. These programs often come in the form of low down payment loans, zero interest loans, or tax credits. Such programs are useful for first-time buyers, who are looking to save on cash.
Aside from the initial payment, you also have to pay a costly closing fee to end a mortgage. This can range from up to 3-5% of the total loan payment. Hence, you should take this into proper consideration before signing for a mortgage. Be aware of those with low down payment, but high closing costs. Look at both items to find the most suitable deal. Take note that some closing deals come with homeowner’s insurance, home inspections, and/or title searches.
Savings after Purchase
Aside forthe down payment and the closing costs, there is a couple more to save up for! You must also set aside budget that will go into furnishing, renovation, repairs, etc. After all, you don’t want to live in a bare house.
What Type of Home?
A house is a good choice for those that are wishing to have a lot of space. However, there are less spacious options that actually have the advantage of having extra amenities. Not to mention, smaller space means lower maintenance. For those that want this, a townhouse in San Juanor in New Manilawould be a good fit for you.
Look at Mortgage Options
Usually, mortgages have fixed rates to be paid over 30 years with a 20% down payment. However, there are ways to get a lower interest rate on mortgages. There are options wherein you can choose to pay 20 or 15-year mortgage loan with lower interest. Also, there is something called an adjustable-rate mortgage. This is a riskier option, but it guarantees a lower interest rate during the first years of the mortgage.
A common mistake with many first-time buyers is getting attracted to the first good loan they see and cashing in right away. What they don’t know is that they can save up to Php175,000 in the first five years of your loan just by looking at more options.
Be sure to inquire at least three lenders and compare their offers.
Should you Get Discount Points?
There will be some lenders that will offer you discount points on your loan. They will give this to you after you prepay the interest upfront. In exchange, they will give you a lower interest rate.
There’s also such a thing as negative points, wherein the lender will pay part of the closing costs in exchange for a higher interest rate. You must be able to decide which one is the best for you or even if availing of these offers is worth it. It would be best for you to speak to a broker about it.
Follow these tips to make sure that you don’t have to foreclose your property. It would be great if you could get the best deals for the down payment, interest rate, and closing costs that fit your lifestyle and budget. Now that you have been informed of these things, you now know what it will take for you to keep your dream New Manila townhouse.