Pay Off All Debt and Build an Emergency Fund

Indeed on the off chance that your month to month house installment is break even with to or less than your current lease, owning a home can be more costly than simply renting. 

Save a Down Payment

Conventional loans are usually about 20%, so try to save as much as possible to make your monthly payment lower as well.  If a 20% down payment is impossible, there are many programs that allow buyers to put down a low amount.

●     Adjustable-Rate Mortgages (ARMs): With a low initial interest rate, ARMs tend to be a good deal, but they allow lenders to adjust the rate, shifting the risk of rising interest rates (and monthly payments) to you.

●     FHA Loans: You can get an FHA loan for as little as 3.5% down, but you'll have to pay a mortgage insurance  (similar to PMI) for the entirety of the loan.

●     VA loans allow veterans to purchase a home with no money down. 

You'll have to pay closing costs, as well. Closing costs are usually 4% or lower of the home's selling price. These charges cover essential aspects of the home-buying process, such as:

●     Appraisal

●     Home inspection

●     Credit report

●     Homeowner’s insurance (if needed)

Get Preapproved for a Loan

When you're sure you've saved enough money to cover closing costs and 20% of your home's cost, then all you need is the additional 80% from a lender!  Before you begin your home quest, get pre-qualified for a loan and take the time to obtain a preapproval letter. Preapproval demonstrates to sellers that you are a serious buyer, which is an excellent way for first-time home buyers to gain an advantage in a market where there's not much inventory, and lots of competition. Arc Home is here to help with the entire home buying process. Give us a call today and we'll be happy to walk through the entire process with you.