BUYING THE FIRST HOUSE

Mirtha Burgoa
Aug 24
3 min read

Updated: Aug 23

GUIDE FOR THE BEST PURCHASE OF YOUR FIRST HOUSE

It can be a challenging but very exciting time that we all look forward to when making that first home purchase a reality. You can learn from the mistakes made by other people and thus avoid them to have a correct, fast and pleasant transaction.

The following 4 recommendations can help eliminate obstacles in the way of making this a completely successful exercise.

1.- First exercise to buy the first home.

The first thing to do is check the credit score. Credit plays a very important role in granting a mortgage loan. The credit score must be improved to ensure good treatment from the lender; that is, to achieve the best terms.

You can negotiate with the lender when you have a good credit score.

For reference, the credit scores are as follows:

• Excellent: 720-850

• Good: 690-719

• Fair: 630-689

• Bad: 300-629

Effect of loan terms:

• Prime: About 680

• Almost Prime: Between 620 and 680

• Sub Prime: Below 620

If you have a high score, you can qualify for credit cards and loans with low interest rates. On the other hand, as long as you can get credit, a low score means higher interest rates.

Main factors involved in credit score:

- Payment history 35%

- Credit utilization ratio 30%

- Age of credit history 15%

- New credits 10%

- Types of credit in use 10%

2.- You must have good reserves.

Buying a home could be one of the largest financial transactions of your life. It involves a lot of money and long-term commitment:

- Initial fee

- Payment of monthly installments

- Insurance

- Repairs

- Property taxes among others.

Therefore, “reserves” are very important, saving as much money as possible not only to make the purchase but also to assume future commitments that the property presents.

You should always keep in mind that the property belongs to the bank until the loan is paid.

3.- Obtain prior approval from a lender.

Many people begin their property search without knowing how they are going to structure the financing for the purchase. Many offers in the past fall through because buyers cannot obtain mortgage credit for the amount needed.

It is wise to obtain pre-approval from a lender to know how much money you can get for the purchase of your chosen home.

4. A real estate agent with professional experience must be hired.

Many people, when they decide to buy their first home, think that they do not need to hire the services of a real estate agent, trusting that there is “enough information” on the Internet.

The experience of the real estate agent is not only useful for overcoming the possible obstacles of presenting yourself as in any negotiation, helping in the search for the property, negotiating on your behalf with the seller's agent, carrying out the required procedures that, by the way, They require a lot of precision to be successful.

The experience and professionalism of a Real Estate Agent turns out to be of great value and at no cost to the buyer.