I’m about to spill the beans…
Because buying a home might be stressful if you’re not prepared.
And sometimes it’s best to learn from other people’s mistakes.
That’s why I interviewed dozens of homeowners about their regrets and things they wished they knew before buying a house. Most of them were either engaged or just married when they bought.
It’s not everyday you hear advice like this.
Here are 7 best-kept secrets that will prepare you before buying your first home…
1. Resist buying furniture or getting credit cards
This one’s big…
Major purchases increase your debt and throw off your DTI (debt-to-income) ratio. Same thing goes for opening credit accounts. As a result, you look riskier to lenders.
Best case scenario, your mortgage rates will go up. Worst case, your loan gets cancelled and your furniture goes to storage.
Many homebuyers learned this the hard way. Be one of the few who are informed.
2. Put emotion aside
Emotions are sneaky.
They take control of your decisions without you realizing. Once you get carried away by your emotions, it’s very hard to turn back.
Remember this while house hunting because it’s easy to fall in love with the beautiful staging or the adorable kitchen. If you fall in love with a house, it’s easy to justify its problems.
You think to yourself, “That’s not a big deal. I can probably fix that.” In reality, each problem could cost you a small fortune to fix.
Put emotions aside and you won’t regret it.
3. Save thousands on interest with this tax credit
Take advantage of Kentucky’s Home Buyer Tax Credit.
Here’s how it works:
- You’ll get back 25% of your mortgage interest each year.
- Up to $2,000 a year (dollar for dollar reduction of your federal income taxes).
- You can still claim the remaining 75% of the interest as a yearly tax deduction.
- You’ll benefit from this tax credit for the entire lifetime of your mortgage (every year you occupy the home).
- Helps you qualify for a new home by reducing your debt-to-income ratio (DTI).
- Maximum purchase price is $271,164 to qualify. Income limits vary depending on your county.
Most first-time homebuyers qualify for the tax credit, but few know about it.
All that money saved on interest could go toward:
- That elegant honeymoon of your dreams
- Holiday decor for your housewarming party
- A new crib for the baby room
- Or even new landscaping or a kitchen remodel
See if you qualify to can take advantage of this tax credit benefit.
4. You can buy down your interest rate
Discount points.
You could bring down your interest rate by paying mortgage discount points upfront. This is generally something to consider if you plan on owning your home long term. That way you’ll recoup the upfront cost later down the road with lower interest rate.
You might decide to not buy points, but it’s better to know you have this option.
Many homebuyers aren’t aware of it.
5. Shop for a mortgage before house hunting
I know it’s tempting to scout homes first…
But it’s the most common mistake of first-time homebuyers.
It’s easy to spend weeks and even months searching for the perfect home. If you’re searching in the wrong price range, it’s disappointing (to say the least).
You’ll have to start the search over from the beginning, which can take several more weeks or months. Talk about stress!
Shop for a mortgage first. That way you’ll have a price range in mind and save weeks worth of time.
The best way to shop for loans is to get pre-approved because you’ll see all the loan options available to you. That way you get the best rates.
…Which brings us to Best-Kept Secret #6.
6. Get pre-approved to know where you stand
Competition is fierce for home buyers in Kentucky…
Getting pre-approved gives you three major advantages.
1. You’ll know exactly how much house you can afford. Save weeks worth of time – it’s the easy and stress-free way to buy a home.
2. You’ll become a formidable bidder. Having a pre-approval letter gives you an edge over other interested buyers. Sellers take pre-approved buyers more seriously because they’re further along in the process. With a pre-approval letter you’re likely to win the bid and start moving into your new home soon.
3. Get the best rates. It’s important that you get the right loan for your unique situation. That way you’re able to get the best rate possible.
Don’t get stuck paying too much for your mortgage.
Take the pre-approval quiz and find out what options are available to you.
Angie is a Mortgage expert writer and recent mother of two. When she’s not pecking at the keyboard bringing you all that great info — she can be found in her backyard hot-tub, deep in action packed fiction novels, or playing catch with Joey, her brown lab.