Buying your first home is a huge financial investment; it is not a decision that should be taken lightly, especially with the increasing rates in the real estate industry.
There are several factors to be taken into account when purchasing your first home, so it's natural to be anxious about them.
Instead of considering this buying process a chore, you should consider it an adventure. Outlined below are a few things you should keep in mind when you buy your very first home.
Buying Your First Home
Purchasing a house is sure to cause an increase in your expenses; mortgage payments, down payments, property taxes, and perhaps even loan repayments are just a few additional costs you'll incur when you first buy a home.
Know What You Can Afford
Even if you and your family are financially stable at this point in your life, you should always be on the lookout for unexpected eventualities.
Realtors and lenders suggest purchasing homes that have mortgage payments equalling a third of your gross income. It's always best to reach out to a mortgage broker, so you can have a better understanding.
Consider Your Credit Score and Debt
Before you make your big purchase, you need to consider your credit score and any student loans or other debts you might have. Review your credit score by asking for a copy of your credit report.
While most first-time home buyer might brush this aside, your credit score determines the interest rate that is applied to your loan. The higher your credit score is, the higher the chances a home loan provider will approve your loan.
Your student loan debt plays the same role here. It's much harder to secure a loan now, especially after the housing crisis in America.
By law, every individual with student debt will be charged 2% on their remaining balance. This can hinder your chances of paying off your mortgage and other housing-related expenses.
If you have student debt, it's recommended that you submit a proper repayment plan so that the amount of liability that you hold can be assessed by lenders.
Use A Reliable Realtor
It is common that most realtors get a cut of the sales price when they successfully sell a home. To avoid getting scammed or fooled into buying an overpriced house, many first-time home buyers are a bit skeptical of relying on a realtor’s services to purchase a home.
But using a trusted and reliable realtor can be quite beneficial, especially if you're purchasing a home for the first time. These realtors have more knowledge about the real estate market, housing prices, and the overall vibe of the different neighborhoods.
A realtor can help guide you throughout the buying process, prevent you from making rash decisions, and can even help negotiate prices for you. It's a win-win situation.
Buy a House That Fits Your Needs
Before you purchase your house, you need to make a list of all of your needs, as well as create a small plan for the future. Remember, your life right now won't be the same as the life you'll have in the next few years.
Ask yourself questions like, are you planning to start a family? Do your current career perspectives look promising? Picture yourself 5-8 years into the future, and then assess whether the house you are thinking of purchasing will be able to fit your needs at that time.
If the answer is no, then you need to keep searching for other places.
Go For a Favorable Neighborhood
You should always research the neighborhood that you are planning to settle in. You can visit these places on weekends.
Doing so will help you get a general idea about the environment and the amenities in that area, like the availability of a grocery store, park, hospital, or school. Before making a decision, ask yourself the following questions:
Does the neighborhood look friendly? Is it a crime-free zone? Is it clean? Are essential services accessible? You can also see the types of houses in that society.
Invest some time into doing online research about that area. You might be able to find reviews from residents that may help you make a decision.
Buying a home is one of the biggest milestones in your life and one of the biggest financial investments you will make. So you need to be patient throughout the process and not skimp on doing research.
Are You a First-Time Home Buyer?
The points we've discussed should be kept in mind before purchasing your new home. That way, you can make sure that buying your first home will be enjoyable and not feel like a chore.
