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Financial Tips for Buying a House

Our team at Legacy Bank provides financial tips for first-time home buyers.

Fool-Proof Financial Tips for First-Time Home Buyers

Buying your first home is one of the most significant decisions of your adult life, but that doesn’t mean it has to be the most stressful. For some, the idea of home ownership has been something they’ve dreamed about since childhood, while others are just dipping their toes into the possibilities that owning a home can provide. No matter your current situation, whether you’re ready to make an offer or just beginning to browse, our team at Legacy Bank has you covered. Check out our fool-proof financial tips for first-time home buyers, and make sure you’re ready when the right house comes along!

Create a Realistic Budget

Like most first-time home buyers, you’ve probably started looking at your local listings and attending open houses in an attempt to determine what you like. But, to set yourself up for success, it’s important to take a close look at your finances and determine how much you can afford to spend on a home before you start browsing listings. Consider your income, expenses, debts, and savings and use them to estimate your monthly mortgage payments, property taxes, insurance, and other expenses associated with homeownership. Setting a realistic budget will help you narrow your options and avoid falling in love with a home out of your price range.

Maintain a Good Credit Score

How often do you check your credit score? While you may hate to admit it, your credit score plays a monumental role in the mortgage approval process and which interest rate you will qualify for. When assessing risk, lenders will use your credit score to evaluate your creditworthiness, so it’s advisable to check your credit report for any errors before applying for a mortgage. If you notice your score could use some improvement, prioritize paying your bills on time, keep any credit card balances low, and avoid opening any new accounts immediately before applying for a mortgage!

Get Pre-Approved for a Home Loan

Don’t underestimate the benefits of getting pre-approved for a mortgage. Getting pre-approved gives you a clear understanding of how much you can borrow and strengthens your negotiating power as a buyer. Keep in mind, though, that pre-approval is not a guarantee of final loan approval but can help streamline the homebuying process. Our team at Legacy Bank recommends comparing offers from different lenders to find the best rates and terms. We offer some of the most competitive mortgage rates in the area and have many mortgage loan options tailored to meet the needs of you and your family!

Save for a Down Payment

While it’s sometimes possible to purchase a home with little to no down payment, we don’t recommend it! Saving for a down payment and putting down a substantial amount upfront can save you a significant amount of money in the long run that can be allocated to other home-related expenses. As a rule of thumb, aim to save at least 20 percent of your future home’s purchase price to avoid private mortgage insurance (PMI) and secure better loan terms. There’s no better time to start saving than the present; you may even consider setting up a separate savings account specifically for your down payment fund.

Open a savings account through Legacy Bank online!

Account for Closing Costs

Don’t forget about the closing costs! In addition to the down payment and monthly mortgage payments, homebuyers should budget for closing costs, which typically range between two and five percent of the purchase price. These costs include fees for loan origination, appraisal, title insurance, and other services. Remember, owning a home comes with ongoing expenses beyond the mortgage payment, such as property taxes, homeowners insurance, utilities, maintenance, and repairs. Be prepared for unexpected costs and set aside a portion of your monthly budget for home-related expenses to keep your family safe and comfortable in the future!

Legacy Bank Is Ready To Help With All Your Lending Needs!

Contact one of our mortgage loan professionals or visit your nearest Legacy Bank branch location to get started.

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