7 Things You Have to Remember When Buying Your First Home
Buying Your First Home? Read This First!
Renting a home or apartment certainly has its perks. It’s a low-commitment, affordable way to put a roof over your head, and if anything breaks or needs fixing, it’s someone else’s problem, and they’re just a phone call away (most of the time!). But at a certain point, most of us get the itch to own our own little piece of the world.
Buying a home is the single largest investment most of us will make during our lifetimes, so it pays to be prudent when making the leap to homeownership. First-time homebuyers often find themselves surprised by certain aspects of the home buying process, but these tips can help make the process of buying a home, smooth sailing.
Get Approved First
If you’re considering purchasing a home, get your financing in place before you actually start house hunting. Finding your dream home only to learn that you can’t qualify for the mortgage you’d need to purchase it is a real letdown. Work out the details with your mortgage professional before you start getting your hopes up.
Understand the Costs
Renting may not help you build a nest egg, but it is relatively simple. You just pay your rent and utilities, and you’re good to go. But purchasing a home has other costs that renters may not be aware of. To start off with, you’ll need to cover appraisals, government recording charges, and other costs associated with the purchasing process. You’ll also need to factor in homeowner’s insurance, property taxes, regular maintenance, and where applicable, HOA dues as well.
Never Buy a Home Without an Inspection
Some investors will purchase homes as-is, but they generally know what they’re looking at. If you’re frustrated with being outbid by buyers who are willing to waive the inspection, you may be tempted to make an offer without requiring an inspection, just to make your offer more attractive to the seller. Here’s the problem: without a thorough inspection, you have no idea what you could be getting yourself into. You might luck out, but you could just as easily end up purchasing a money pit.
Consider Hiring a Buyer’s Agent
Unless you’re purchasing a FSBO home, the seller has the advantage of working with a real estate professional. Buyers’ agents are less common in most markets, but their services can be worth enlisting. It pays to have someone in your corner who knows the local market and the ins and outs of the industry, especially if you’re new to the home-buying process.
Don’t Overextend Yourself
If the sub-prime mortgage crisis taught us anything, it’s that just because the bank says you can afford it doesn’t make it necessarily true. If you’re working with a conscientious loan officer, they’ll likely try to steer you in the direction of purchasing a home you can comfortably afford. Others may try to push you into committing to a mortgage that is beyond your means. Homeownership is much more enjoyable when you’re not always stressed about making the monthly payment, so figure out your budget, and don’t bite off more than you can chew.
Define Your Priorities Before Buying Your First Home
If you’re planning on having children soon, then you’ll certainly want to buy a home in a good school district, and you’ll probably want at least one extra bedroom. If you’re really into gardening, you might need a big yard. If you’re the crafty type, having a sizable garage or workshop might be a priority.
When purchasing a home, figure out which of your priorities are non-negotiable, and which can be overcome for the right home. The last thing you want to do is buy a house that doesn’t really suit your needs, just because it seems like a good opportunity.
Save Up for a Down Payment
While it’s true that certain programs allow first-timers to qualify for a mortgage with little up-front cash, you’re probably better off saving up for a down payment.
The larger your down payment, the less you’ll pay in interest. Plus, having a sizable down payment puts you in a better position to negotiate.
We hope these tips help your first home buying experience goes off without a hitch. Best of luck out there, with your house hunting endeavors!