Some of the life advice I received when growing up was about how marriage was less challenging than a mortgage, which was less challenging than a baby, but all of them brought happiness if you worked to make each the best they could be. It does take effort and solid planning, however. This means you need to consider big picture items as well as smaller, but still important items, like a crib. With the right attitude and some preparation, you can make family planning as a first-time homeowner a pleasant experience. Here are some tips to consider.
Have several serious talks with your significant other, and keep track of the conversation.
Communication is key during this process, and not just with your broker or insurer. The first step is with your partner. There needs to be a constant and consistent line of communication between you and the person you are starting a family with. As you discuss budgets, family size, pets, auto insurers, and mortgage lenders, it can easily become overwhelming and confusing. Don’t assume that each of you will remember every aspect of all your conversations.
You’ll want to discuss how to compare home loans. Keep talking throughout the process to not only establish you’re in agreement but to keep the process moving forward. Keep a running list of insurance agents you like, mortgage loans you’ve applied for, and other important borrower information.
Be on top of your credit score.
A good credit score will be a strong ally during the home buying process. It will often equate to a lower rate on your monthly payment. Additionally, your mortgage lender will often be able to offer more money in the loan. That means your personal property potentially just increased in size, value, or both.
A solid debt to income ratio and a solid credit score will help your annual percentage rate and interest rate be the lowest rate possible. 100 points on your credit score could end up saving you roughly $500 or more annually. Lower credit scores equate to higher interest rates.
Start saving two months ago.
We all wish we could have started the process sooner, but as soon as you believe you want to start a family, it’s a good idea to start saving for one. The main reason for this is to lower your down payment. Financial products like a mortgage calculator can prove that you’ll receive a better rate with more upfront money. A $300,000 property with a 3.8% interest rate and 10% will typically carry a mortgage over $1650. If you are able to improve your down payment to 20%, your payments should decrease to roughly $1400 a month. For a 15-year mortgage, you’ll save roughly $350 a month for the larger down payment. This doesn’t begin to calculate the money you’ll save in interest during the life of the loan.
Also, keep in mind that lenders will be looking at your finances, and they’ll want to know the sort of capital you’ll have access to when determining your mortgage rate. The best rates are going to come from people who have more assets. The more you can save, the better off you’ll be.
Make sure the nursery is good for both you and your baby.
It’s also important to consider how your family will grow and understand that it will. Your nursery décor needs to be functional for you and your baby. You both are going to be spending a lot of quality time there. Consider these intimate spaces while planning. If you build them with forethought and love, they will nurture those that use them.
Also, keep in mind that furnishing a new home can be expensive. The nursery alone can cost over $2000. Make sure to plan for these expenses early so they don’t surprise you in the end.
Shop around for the right price.
There are several ways to do this, not just with your mortgage broker. If you don’t mind moving a great distance, and your job will allow it, searching outside of your region might open up significant opportunities. If you’re thinking about staying local, you’ll want to ask questions like how does one home insurance compare to another? This could save your thousands during the length of your home loan. Determining if you need to carry additional coverage for an earthquake or flood insurance will also be factors to consider. Get multiple quotes a fine the best rate.
It might seem daunting, but with the right planning, first-time homeowners can have a fun experience.
