Aug. 25, 2016
Buying your first home can be very exciting and stressful time. Who do I need to contact? What do I need to do? Can I afford a new house? A few helpful helpful tips on things to think about during your first time home buying experience are listed below to ensure you go in with all the information you need to make the best decision for yourself.
Are you able to afford a new home?
In our current economy interest rates are very low which makes for a buyer friendly real estate market. Many people don't think about all the costs when buying a home including moving costs, down payment, closing costs and furnishing your new home. All the extra expenses of owning a home will add up quickly which is why it's important to consider what type of monthly payment you will be able to handle for the life of the loan. In some cases it's easier to start out smaller for your first house than go big and and put yourself in a challenging financial situation. Make sure it's something you can afford.
How soon are you wanting to move?
A big part of owning a home is staying in that home long enough to start building up equity, the first part of your mortgage payments only to towards the interest of the loan not the principal amount itself. Renting is always a good option if you don't believe you're in a desirable financial situation that would allow you to make regular monthly house payments. Sometimes it's easier to be in the area awhile before deciding if you're ready to put down roots there or not.
Will you be buying on your own or with someone?
One of the easier ways to ensure pre-approval from a bank in regards to getting a loan is teaming up with another person. Whether that person is your spouse, parent, friend, in-law - you're able to buy a home with anyone who has more cash on hand or that has a good credit score. Be extremely cautious if you are buying a home with another person since you both become liable if any payments are defaulted on. A couple important things to ask are do you both have similar future plans, can you both meet the financial obligation, and what would happen if one of you wants out. If you're not certain the person you would be getting the loan with is reliable you're better off trying for pre-approval on your own first before you seek other help.
Fixer Upper vs Ready to Move In
Depending on your budget and pre-approved loan amount you're going to look at a wide array of homes, some that are more move in ready than others. The thing to keep in mind is will you have money left over after you purchase the home to install new carpet or paint or put on a new roof or buy appliances; if the answer is no youmay want to stay away from a fixer upper and search for something that is ready to move right into without any repairs or changes which will more than likely put you at the top end of your budget. If the answer is yes, staying on the lower end of your budget should be one of your target goals in order to allow the extra funds to be spent on repairs and upgrades that you would like (or someone you hire) to make once you own the house. You want to be able to enjoy your new home and being comfortable with all the incurred costs that come with owning a new home are a big part of that.
Create a Budget for Buying
In order to get a better idea of what you will be able to afford, it's a good rule of thumb to write out your month to month expense to ensure you're able to meet a monthly payment requirement on a new house. When buying a house it's important to consider property taxes, insurance costs, utilities, lawn maintenance equipment (bigger yard will require lawn mower), repair costs (if you're buying a fixer upper), and even in some cases HOA dues. Planning ahead will help ensure your first home buying experience is a positive one.
Now is a GREAT time to buy a home! Give us a call to set up your private showings and let us help you find your first home TODAY!