Buying a Home with Help from AFG

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Everything You Need to Know About Buying Your First Home

Buying a home is exciting, but it can also be overwhelming for first-time homebuyers. Between finding the right mortgage lender and taking care of any last-minute inspection concerns, it can be difficult to determine which parts of the home-buying process to prioritize.

Review this guide for a comprehensive overview of the top priorities for first-time homebuyers.

3 Aspects of the Buying Process That First-Time Homebuyers Need to Prioritize

These are the top aspects of the house-hunting process to prioritize for first-time homebuyers.

1. Mortgage Search

Mortgages can have terms up to 50 years, and depending on market conditions and personal credit factors, there might not be an opportunity to refinance. Here are three things to analyze when looking for a mortgage:

  • APR and interest rates: Find out if they are variable or fixed interest rates and whether the lender offers discounts for additional services.
  • Down payment and closing costs: Down payments can vary greatly, from 20% with traditional lenders to as little as 3.5% with FHA loans.
  • Type of mortgage: The type of mortgage someone chooses can determine factors like maximum loan limits, type of property, and term lengths.

For some families, a mortgage is for life. Spend time researching and comparing options to find the most competitive offers.

2. Home Inspection

Whether buying a brand-new home or looking for an American Craftsman-style home from the 1930s, home inspections are an important part of the home-buying process. This is what to scrutinize in the inspection report:

  • Electrical systems: Older homes will need a more thorough analysis of electrical systems, but also consider larger electrical appliances like the HVAC system.
  • Structural integrity: The foundation of a home needs to be stable, the flooring and subflooring should be in good condition, and exterior features like chimneys need to be secure.
  • Water drainage: Water can cause significant damage in a home, and older homes can be more susceptible to destruction. Consider both drainage and condensation concerns.

The home inspection is essential to ensuring that a home doesn’t come with any serious damage that needs to be repaired, so research home inspectors diligently.

3. Insurance and Warranties

Purchasing a home is an investment and first-time homebuyers should be prepared to purchase insurance and warranties to protect it. There are three types of services that offer the most protection for homeowners:

  • Home warranties: A home warranty protects key systems in a home, like air conditioning, major kitchen appliances, and water heaters.
  • Homeowner’s insurance: This insurance protects homeowners from losses as a result of disasters like fire or hurricanes, though flood insurance might not be included.
  • Mortgage insurance: Mortgage insurance is included with home financing when someone cannot pay a standard down payment, and it protects the mortgage provider from loss.

Mortgage and homeowner’s insurance might or might not be required when choosing FHA loans, but home warranties are always optional.

Choose a Mortgage Provider with the Right Options

The right mortgage provider can connect first-time homebuyers with a network of potential loan options, including FHA loans that have lower down payments. This makes them a top priority when searching for a new home.

Ready to find out if you qualify for FHA loans? Contact Americas Funding Group today to get started.