A Beginner’s Guide: Buying Your First Home
There are a lot of milestones that you will cover over the course of your life—taking your first steps, graduating high school and university, marriage, and most importantly, buying your first home. It is considered quite an achievement, both personally and financially, when you buy your first house. It can be quite challenging to search for and buy a home when you do not know what you are looking for.
You need to keep in mind several things before you start looking for a property to purchase. You may be quite anxious about the purchase, and that’s okay. It is essential to consider the added financial burden of maintaining a home rather than renting one.
But it is also true that first-time homebuyers also enjoy certain special advantages created to encourage new purchasers into the real estate market. We have curated a list of specific tips or strategies you can follow to navigate your way through this huge milestone in your life.
Be clear of your financial position
The first step in buying a home requires you to be clear of your current financial position. You should determine if you are ready for a big move, such as purchasing your new home. It is essential to consider that homeownership is a lot more expensive than renting.
Homeowners are responsible for added costs such as garbage pickup, water, electricity, utility costs, and home repairs. The entire property is the responsibility of the homeowner. You should also consider the money you will need for house tax and home insurance. If you are not financially prepared for such costs, you may end up with certain debts.
It is well-advised to save up an emergency fund before buying a house. It is wiser to wait until you are financially secure rather than getting pressured by your friends and family’s expectations of buying a new home.
Start looking for a loan
It is important to understand that not everyone can afford to buy a home without getting a loan. It is quite sensible to get pre-approved for a mortgage before you start hunting for the perfect house in many cases. If you get a pre-approval, it can help you narrow down your search since you will know how much you can afford to spend on a house.
There are many different kinds of loans and payment options available for a mortgage. It is best to research well before taking any options. You also have the option of deciding whether you want a long term loan or a shorter one.
A long term loan will have a lower monthly payment but a higher interest rate than a short term loan. You also have to decide if you would like to go for a fixed-rate mortgage or an adjustable-rate one. The former has the same amount of interest every month, no matter what is happening in the economy. On the other hand, the latter can be expected to give varying rates of interest over time.
Contact real estate professionals
Navigating your way through this real estate market can be quite challenging. You may know exactly what you’re looking for in a property, from the number of bedrooms to an attached garage and other vital factors that can influence your decision to buy a home.
However, you may not be aware of specific issues that you should look out for, such as mold, insects, leaks, furnace issues, and many others. Experts at StewartRealtyLLC.com recommend finding an agent before you start looking for houses so that your interests are well-protected.
There are also many for-sale properties that people do not advertise and leave in the hands of trusted real estate agents. It is also quite difficult to deal with all the paperwork for buying a new home, which can be done easily with a real estate agent’s help.
Be sure to have your down payment ready
The downpayment that you put for your house can reduce what you owe, in turn reducing your costs. It is important to realize that if you put less than 20% of the price of your house as a downpayment, you could end up paying private mortgage insurance.
It is not always a case to pay a 20% downpayment for your house to buy it, but it is important to consider the added insurance costs if you do not. You should be careful and consider what payment method you would use for your down payment, as it will affect you quite a lot in the long run.
Get the home inspected
It is important to get the whole house thoroughly inspected. This is not the same as an appraisal. The buyer usually pays for the home inspection. This is for the benefit of the buyer so that there are no hidden problems in the house before you buy it.
The home inspector will check any issue that can be a deciding factor in you buying the house, such as termites, mold, leaky roof, or severe foundation problems. This can help save you thousands of dollars in repairs later on. You may also be able to renegotiate the price of the house if you find certain faults that need to be repaired. In cases where you are trying to be duped by the seller, home inspections can offer a good way out of the deal.
Be patient during escrow
Once you have gone through the trouble of endlessly searching for the perfect house and have found it, it is only a matter of being patient. Most people buy and sell houses in escrow. Escrow is meant to protect the lender, the seller as well as the buyer. Depending on a multitude of factors, it can take quite a while to close and complete escrow. It is important to be patient during this time.
Buying your first home is quite a challenging task that can leave you stressed for weeks. Follow these easy steps to help you find the home of your dreams. And live those dreams in reality.