Ready to Purchase Your First Home?
If you are a first time home buyer, it’s only natural that you feel a bit overwhelmed. It’s the most significant purchase of your life, and you want to make sure that it goes as smoothly as possible. There are a lot of things that you need to consider when purchasing a home, and you can use these tips to help take some of the stress out of the process.
1. Mortgage Pre-Approval
The first step of your home-buying process should be meeting with mortgage consultants at your bank to get pre-approved for a mortgage. The last thing that you want to happen is to fall for a house that you end up not qualifying for. In fact, there are many times where a real estate agent won’t work with you until you’ve gotten your pre-approval. The consultants are trained to give you an evaluation and a pre-approval for an amount that you can afford. Once you know that number, you can start house-hunting for homes within that dollar range.
Credit is a huge part of what is taken into consideration when getting approved for a mortgage, so it’s smart to get your credit report before you begin. If you have anything lingering on your report that could be causing a negative impact, you should get it paid off. Other things taken into consideration when getting a mortgage are your income, and the down payment you have.
2. Seek Out a Real Estate Agent
There isn’t a law stating that you have to have a real estate agent when buying a home, but it’s recommended; especially for first-time home buyers. Having someone who is familiar with the process can be extremely beneficial while you’re going through it. You will likely have a lot of questions, and they have the experience to be able to answer them for you. In addition to giving advice, a real estate agent is likely going to have a broad network connection such as inspectors and insurance agents who can help you.
3. Consider Your Budget
One of the biggest considerations with the home-buying process is your budget. You may get pre-approved able to afford the purchase of a home, but you should think about it too. Your lifestyle can impact the budget that you have for a home. When you take on a mortgage, it is an essential monthly payment. Taking on a huge mortgage payment might mean that you cut out that weekly dinner with your friends. Ask yourself if you could still afford your mortgage if you lost your job and didn’t work for three months.
4. Have an Open Mind
Many people see million-dollar homes for sale and expect that their first house is going to be like that, but it’s rarely the case. Keeping an open mind is essential. Your first home might need to be fixed up, and it might have awful wallpaper. The important thing to keep in mind is that all of it can get changed, and the fundamentals are there.
5. Consider Closing Cost
There are more fees with purchasing a house that is outside of the house sell itself. That includes what you spend on a realtor and your closing costs. Prepare to set aside 2% for those closing costs. They will vary depending on the property you’re purchasing, and where you live. Also, consider putting aside extra money for a rainy-day fund. When you own a home, you never know when something is going to break down.
Even though there are a lot of stresses that come with purchasing your first home, there is a lot of excitement, too. Be smart, be logical, and enjoy the first significant purchase of your life.