Purchasing a home as a first-timer can be a daunting task, especially for young adults or those without experience making such big purchases. However, it should be a fun process too!
Rushing through the home buying process without adequate preparation can prove tremendously costly. You want to be certain you get the details right, from start to finish.
Here are some critical things to consider to help you get the most out of your home buying journey.
Understand the Full Cost of Buying a Home
When buying a house, be sure to consider all the costs associated with your potential property. There will be considerable upfront costs, such as closing costs, down payment, new furniture, moving expenses, etc.
Most notably, your monthly payments will not only include your mortgage payment but also costs like property taxes and homeowner’s insurance and other recurring costs of being a homeowner such as utilities and home maintenance.
Determine Your Budget
One of the first things to consider when buying your first home is how much house you can afford. To make sure you can comfortably handle the process, take time to review your financial situation based on your income, expenses, assets, savings and debts. Your budget will likely dictate the size, location and amenities of your future home.
You’ll need to create a budget for the monthly mortgage payment and other homeownership costs like property taxes and homeowners insurance. If the home buyer plans to make up to 20% down payment, it’s recommended they look for homes that cost no more than three to five times their annual household income.
Understand the Value of the Home
The biggest risk of valuing a home incorrectly is overpaying. The best way to understand the actual value of any property is to look at other comparable homes in the market to determine the property’s fair market value. Working with a real estate agent that understands market values in your area can be quite helpful.
Location is paramount. Take into account factors like the local job market, cost of living and other key considerations that will likely impact your quality of life. These will include easy access to work/school/social scenes, proximity to services, the safety of the neighborhood, etc. Overly long commutes or underperforming school district for your children can leave you with buyer’s remorse.
Use a Trusted Realtor®
Engage an experienced real estate agent who can help you find a home. Having a professional by your side will give you valuable market insights to help you navigate a complex real estate market and ensure you make a smart purchase in the end. Find someone that is knowledgeable about the area you wish to live in to make the process much easier as a first-time home buyer.
Consider Your Long-Term Plans
Before committing to buy what you think could be your dream home, think long-term. The home you choose should meet your future goals, not just the immediate ones. Sit down with your family and think about where you see your life in three to five years before finding something that’s going to meet some of those needs.
While the whole home-buying process can be quite demanding, it really is an exciting experience. Whether it’s sifting through financials and paperwork or going to open houses, make sure you have the most fun exploring this new phase of your future. Happy home buying!