There’s always a first time for every single investment, especially when it comes to buying a house. Once you decide to make a home purchase, you are likely to turn to the internet. You will need to check reviews of lenders online, find a reliable realtor to help you find a suitable home and see what else you need to make a seamless home purchase.

With all the tips you can find on the internet, it is easy to feel overwhelmed. Thankfully, there are many reliable websites you can turn to. For starters, you can check the following first-time homebuying must-knows.

You Can Qualify for Loans and Grants

Many first-time buyers are afraid to make a home purchase because of fear of getting a loan rejection. The good news is, even low and middle-income earners can qualify for loans for first-time homebuyers. This makes buying a house more affordable.

Such loans and grant programs usually have lower down payment requirements. You will find that you can easily qualify for instead of chasing after conventional loans. But did you know that some buyers can also qualify as first-time homebuyers even if this is not their first time buying a house?

You can apply for first-time homebuyer grants, programs, and loans if you are one of the following.

• A displaced homemaker (providing services to family members without being paid) who only owned the property with their partner
• A single parent who used to own a house with an ex-spouse
• One who never owned a house even if their house owns a house
• Someone who did not own a primary residence with three years before buying a house

Paying for Discount Points Before Weighing the Pros and Cons

Not many homebuyers know about mortgage discount points. These are upfront fees you can pay to lower reduce the mortgage interest rate. This will then reduce your monthly payments.

Buying mortgage points is often called buying down the rate. Most lenders allow borrowers to buy between one and three discount points. How much each point can impact your mortgage interest rate will also depend on your lender.

Just because you are given the option to buy discount points does not mean you should make the purchase. If you plan to live in the house for at least seven years and have enough cash in hand, it makes sense to buy discount points. But you are already paying for the minimum down payment. Then you can consider skipping the mortgage discount points.

Buying Can Be Cheaper Than Renting

Many people think they are better off renting a house than buying because the first option is always cheaper. In reality, many homeowners can attest that they can save more after making a home purchase. This is since it can be cheaper to service a mortgage than pay for rent.

In more metropolitan areas, there is very little difference in the costs of renting and owning a house. When given a chance to buy a house, you can reap more perks for owning a house than simply renting. While you have more responsibilities as a homeowner, you can enjoy building equity that you can use in the long run.

Remember that you don’t necessarily need at least a 20% down payment to buy a house. If you qualify for cheaper mortgage loans, you can enjoy low-to-no down payment fees. Plus, nothing can match the joy of enjoying better privacy and flexibility found in homeownership.

Where You Get Your Cash Deposits From Matter

One might think that for as long as you can pay a down payment, your lender will readily accept your mortgage. Aside from the usual mortgage requirements, your lender will investigate where you got the money you will use as a down payment. If your monthly and annual income do not match your savings, they right question or reject your application.

Not all lenders and mortgage types accept cash gifts given to you by a loved one as a down payment. Lenders have a way of knowing whether the amount of cash in your savings is indeed yours. If they can’t verify the source of your savings, they will request a reasonable explanation.

Did you receive money from a family member or friend, and do you plan on using this as part of your down payment? Then your mortgage lender will request you to obtain a gift letter. This will serve as your proof that they gave you the cash as a down payment gift and that they don’t expect you to pay them back.

These are but four things all first-time buyers need to know before investing. Know that there is so much more to learn when it comes to making your first home purchase. But by keeping this list in mind, you will find it easier to make the right homebuying decisions.

Meta title: For First-time Homebuyers: What You May Not Know When Buying
meta desc: Your first home purchase will always be memorable as an important investment. Here’s what you should learn about making this home buying experience worthy.