Buying a first home can seem overwhelming for many people. It is true that there are many important factors to consider and decisions to be made. Despite this, with some good preparation and research anyone can be ready to make a smart first home purchase.
Type and Features of Home
One of the most important considerations is what a buyer is really looking for in a home. The home’s location and size are obvious factors. First time buyers may be less aware of the many types of homes to choose from. Options like duplexes or multi-family homes may be a good choice for young people looking to have the freedom of a home with less of a financial burden.
Affording a home is one of the most stressful factors for first home buyers. It is a very good idea to work with a mortgage company to determine how much house you can comfortably afford. It usually isn’t much good shopping for homes or working with realtors without having the money available. Most realtors won’t even work with buyers who haven’t been pre-qualified for a mortgage. Mortgage qualifications are often the defining factor when it comes to what homes a buyer may be able to purchase. Since the housing market crash, lenders are being much more careful about how they lend and how much they lend. This can help new buyers because they are less likely to be offered a loan that they can’t actually afford.
Savings and Down Payment
A big shocker for new home buyers is often the down payment required. Most homes will require a 20 percent down payment. This is in addition to any closing costs or other fees that may be associated with the purchase. Younger home buyers may need to spend quite a bit of time and effort preparing for this expense. Planning ahead with smart investments are often what makes this cost possible and realistic.
Consider Additional Costs
When looking at affordability, it is important to look beyond the monthly payment. Total housing cost will be much more than just the mortgage. Unlike in an apartment, a house will require payment for all utilities and maintenance. Depending on where the house is located, there may also be homeowner’s association fees. Taxes are another new consideration for a person transitioning from renting to owning. Property taxes can represent a major expense owners will need to prepare for.
Plan for the Future
A home is truly an investment in the future. It is designed to be lived in long-term. A new home buyer should consider a home not only a significant monetary investment but also a commitment to living in an area for an extended period of time. It is important to consider how well the home will fit into life not just in the present but also ten or fifteen years down the road.
With these and other smart tips, first home buyers can come to the table prepared to make a smart buying decision. With the right planning, tools and knowledge, the important life goal of home ownership can finally be within reach.