The day you close on your first home is a milestone moment, and something to be incredibly proud of. While making this investment is the beginning to building wealth, it can also feel overwhelming if you aren't prepared. If you’re thinking about buying your first home, don’t fret! We’ve put together a list full of ways to save thousands of dollars on the purchase of your first home.
Tip 1: Find the Right Home Loan Specialist
The right Home Loan Specialist will do more than just give you a mortgage. They will be your guide through every step of the home buying process. Not only will your Home Loan Specialist help to determine how much you can borrow, but they should help you decide how much you feel comfortable spending. Just because you can borrow $500,000 doesn’t mean you should!
By working with a loan expert, you will be empowered to make the best financial decisions for you (even if that means you’re not quite ready to buy right now). At Churchill Mortgage, we help you to understand every aspect of your mortgage. That means from the moment you call to inquire about a home loan to years after your closing day, we will check in and make sure you’re on track to achieve your goals.
Tip 2: Find the Right Realtor
Besides a Home Loan Specialist, having the right Realtor is key to feeling confident when buying your first home. Your Realtor is instrumental in not only helping you find the right home for you, but in negotiating the price of the home. In today’s competitive market, it’s more important than ever to have a Realtor who knows what’s important to you and advocates for you. For example, if you can get a better deal on a house, but may have a bit longer of a commute, your Realtor should want to sit down and go through the details so that you feel secure in your home buying decision.
You can find a Realtor a couple of different ways:
- Researching real estate agents in your area and hiring based on their success rates of helping people find their first homes under or at asking price.
- Ask your Home Loan Specialist. They likely have a list of Realtors they trust who are trustworthy.
Tip 3: Get a Total Cost Analysis
One of the things we do at Churchill Mortgage to help first-time homebuyers is called a Total Cost Analysis. A Total Cost Analysis will breakdown your finances and loan options to help you see exactly what you will be paying over the life of your loan. This will compare different loan lengths such as a 15-year loan vs. a 30-year home loan. It will also help you compare the impact of different interest rates and down payments so that you can make an informed decision and feel confident moving forward.
Tip 4: Become Certified and Secured
Many real estate markets are dealing with low housing inventory so it’s important to position yourself as a cash buyer. The next best thing to paying cash for your home is becoming a Churchill Certified Home Buyer. Your loan will be pre-underwritten which means by the time you’ve submitted an offer on your dream home, you’ll be ready to close quicker. This extra step can make you more attractive to sellers.
Once you’re Certified, it’s time to secure your rate. We know that when you start searching for your first home, it may cause some anxiety to think about your interest rate going up before you find a home you want to buy! The best way to relieve that anxiety is to become Rate Secured. With Churchill's Rate Secured program, your interest rate is capped for 90 days, giving you the peace of mind to shop for your first home without the pressure of your interest rate rising.
Here’s the best part: If rates go down, you can lock the rate in at the lower rate. And if you don’t find your home within the first 90 days, you can reset and secure the current rate for another 90 days. It really is the best of both worlds.
Tip 5: Save as Much as You Can
There’s no way around it. The larger your down payment, the smaller your mortgage. This means, the more you put down up front, the less you will pay overall. We recommend putting down 20% but realize this number can seem out of reach for many first-time home buyers. Because of this, try to get as close to 20% as you can. but know that many first-time home buyers are putting down less. If you’ve been saving for two years and just can’t reach that magical number of 20%. It’s okay to lower your goal to 15% or even 10%.
Your Home Loan Specialist can go over all these details with you to make sure you are able to put money down without eliminating your savings. You still want to allow some wiggle room for expenses, furniture, vacations, etc.
Tip 6: Pay Down Your Debt
Your debt-to-income ratio is very important when deciding how much you can borrow. In case you’re unsure, your debt-to-income ratio is the amount of money you owe, versus what you are bringing in. This can be anything from student and car loans to credit cards and medical bills. It’s beneficial to have paid down your debt and to have a solid plan in place for whatever debt you still have at the time of your home purchase. The less debt you have, the better your interest rate will be.
Tip 7: Be Flexible
When buying your first home, you’ll more than likely have a list of things that are important to you. Whether it be a big backyard, a highly-ranked school district, or just a simple fireplace and hardwood floors, you want your home to be right for you.
However, you can save thousands of dollars by being flexible when buying. Is the smaller backyard going to save you money on the home loan AND in landscaping? Will it cost less to install hardwood floors in a year or two than it will to take on the mortgage of a home where they already have them? It’s important to step back and look at the big picture of lifelong savings as a first-time home buyer. Only you know what’s important to you but going into more debt than you can handle is never worth it.
Buying your first home is something you’ll never forget. It’s important the experience is a good one. At Churchill, we understand just how much this investment means to you, and we want to be on your team when you make it happen. Even if you’re unsure where to start, let our family of educated and passionate professionals help you make the best decision for you, your family, and your future. No matter where you are in your home buying process, we’re here to help you save and learn.