Are you a first-time homebuyer? This article will tell you everything you need to know to make that big purchase easier. Keep reading below to find out five tips every first-time homebuyer should know.
Buying a house for the first time can be a really exciting but daunting task at the same time. Since you are making such a huge investment and a long-term commitment, you definitely want to make sure that you’re making the right decision. What’s more, there are so many steps, tasks, and things to pay attention to, and you may be anxious about making a really expensive mistake.
We’ve put together five tips for first-time homebuyers that will help you not only find the perfect home for you but that also doesn’t hurt your future money goals. Keep reading below to find out what those tips are!
1. Know how much you can afford
This one may sound obvious. Yet, you’d be surprised how many first-time homebuyers actually wrongfully calculate their budgets or ignore it and purchase a home a lot more expensive than they would afford.
First of all, you need to consider that a home’s price isn’t the only cost you’ll be paying. When saving for buying your first home, you need to take into consideration costs like down payment, closing costs, move-in expenses, and homeownership.
You’ve probably taken the down payment into consideration so far, but did you think about how much the closing costs will cost you? The closing costs include fees and expenses that are required to finalize your mortgage. What’s more, you also have to pay attention to move-in expenses because after you purchase the house, you’ll likely have to make some immediate repairs or investments, upgrades, or furnishings.
Plus, another thing that most first-time homebuyers tend to ignore is the homeownership costs. In other words, all the things you’ll have to pay for once you move into your new home, like maintenance, bills, property taxes, and homeowners insurance.
So, when you calculate your budget and how much you can afford to pay for the property you’re planning to buy, make sure you also take these costs into consideration.
2. Figure out what type of mortgage you need
Need to take out a home loan in order to buy your first home? Make sure you carefully consider the type of mortgage you need.
There are many factors to consider when applying for a home mortgage, including your home’s location, length of time you plan to stay there, your credit score, and competition from other buyers. For example, your credit score is the factor that will determine whether or not you qualify for a mortgage and affect the interest rate you’ll get from your lender.
Now, there are different types of mortgages to consider, such as a conventional mortgage, a government-backed mortgage, or a fixed-rate or an adjustable-rate mortgage. The best way to figure out which type of mortgage suits your needs the best and you qualify for is to talk to a mortgage broker. Think of a few questions to ask mortgage brokers and set up some meetings to find out more information on the different mortgages available to you.
3. Consider your needs and preferences first
Once you figure out your finances and get preapproved for a loan, it’s time to go house hunting. In other words, you actually need to start visiting various properties and choose your dream home. Yet, before you do that, take a minute to think about your needs.
The property you buy isn’t just a roof over your head but should be a home where you feel comfortable, especially since you’ll spend most of your time inside that house.
Are you moving in with your family or plan to start a family in your new home? Will you be sharing your home with your spouse only? The answer to these questions will determine how big your new home should be. Consider the number of bedrooms and bathrooms so that your new home will feel cozy, not crowded.
Also, consider what extra features you want to add to your home and if there’s enough space for that. Think of how much storage space you need.
What’s more, consider things like style, design, and landscape. What are your preferences?
4. Research neighborhood for the best fit
Another common mistake that many first-time homebuyers make is not researching the neighborhood they will be moving in to. Make sure you don’t make the same mistake!
Here’s the deal: you can fix or change almost anything about the property if you don’t like it the way it is, but you can’t move the house to another neighborhood if you find out that it doesn’t suit your lifestyle and needs.
What should you be paying attention to when researching the neighborhood? Well, first, you should check how far it is from your work if you’ll be commuting every day to work. Next, check for local amenities like restaurants, pharmacies, supermarkets, schools, and green spaces.
Lastly, pay attention to who your neighbors will be. Consider their age and lifestyle. Why is this important? Well, imagine that you move into your new home to start a family or to retire and wish to have a calm and peaceful lifestyle. But then you discover that you’ve actually moved next door to a frat house that throws parties every weekend. That would totally mess your homeownership experience, wouldn’t it?
So, make sure that the neighborhood and the neighbors are also a good fit for your needs.
5. Check the property
Finally, once you find a property that you want to buy, before sealing the deal, make sure that you get the house checked or check it yourself.
Look for any sign of damage that might turn into financial headaches for you, such as a broken roof or foundation. Also, look for signs of water damage or mold. You should also take a peek at the electrical panel and test every toilet, sink, shower, or bath in the house.