Posted: 12 March 2018
What’s the best thing about buying a home?
Most would probably say pride of ownership. Unlike renting, where you’re limited as to how much you can fix up the place, home ownership gives you the freedom to decorate as much or as little as you want.
There are also other advantages to owning a home. It’s a good investment for one thing. A lot of people consider their homes as a hedge against inflation.
Now, if you’ve been thinking about purchasing your first house, you’ll need to familiarize yourself with the process, which can get quite complicated. But don’t worry. Here, we’ll share our 10 best tips for buying your first home.
Think of buying your first home like you’re learning how to drive for the first time. You can’t afford to not pay attention to your teacher or you’ll end up in an accident.
That’s really how it is with property buying. The wrong decision can come back to haunt you. If you know of any first-time home buyer seminars in your area, go for it.
Some of the seminars are offered for free so you’ll lose nothing but gain so much in terms of house hunting, financing, and even home maintenance tips.
2. Start Saving ASAP
Even before making the decision to purchase your first house, you should have enough money saved that you don’t need to worry about where to get cash for that down payment.
Don’t start saving when you’ve already spotted your dream home. This is one case where you should be ready when opportunity knocks, as cliche as it may sound.
The usual requirement is 20% down, but you can find lenders who are okay with much less. However, you should keep in mind that the less down payment you give, the more you’ll have to pay for PMI or private mortgage insurance.
3. Check Your Credit
Although there are ways to buy a home with bad credit, you should remember that it will mean paying more than someone who has a good credit score. You don’t want to wait to repair your damaged credit when you’re itching to settle down, especially if you’ve found your dream home.
Plus, it’s easier to lock in a good mortgage rate if your credit score is good enough. So make sure to be on the lookout for opportunities to keep your credit sparkling and always dispute errors that may be dragging your credit score down.
4. Be Realistic
When you’re house hunting, consider your budget. There’s nothing wrong with eyeing a beautiful property but don’t set yourself up for disappointment when it’s something you can’t really afford.
But if you have your heart set on a particular home – this is, after all, your first house – take the time to review your average monthly budget and see where you can save. Don’t give in the impulse to buy just because you’re scared someone might snatch up your dream home.
You don’t want to get the house of your dreams only to worry constantly if your next check will bounce.
5. Prepare The Necessary Documents
Applying for mortgages means paperwork — a lot of it, actually. So if you don’t have your income and taxes organized, now’s the time to do so.
Other documents you’ll come across during the house buying process are the sales contract or purchase agreement, title documents, a title insurance policy, disclosures (where applicable), and loan documents.
6. Narrow Down Your List
When you know your budget and are prepared to make compromises, it’s easier to narrow down your list of first house options. Having a checklist of your needs versus your wants can be helpful as well.
If, for example, you’re browsing real estate in Meridian Idaho, you can use your checklist to zero in on a property that fits your budget and your priorities. The last one might include things like the neighborhood, proximity to work and school/daycare facilities (if you have kids), and entertainment options (i.e. shops, restaurants, etc.).
7. Understand Your Mortgage Options
Unless you have money to pay for your first home with cash, you’ll need a loan or some type of mortgage. This means you’ll need to explore your options based on your needs.
If you never plan to buy another property, you might be interested in getting a long-term fixed-rate mortgage. But if you don’t plan to stay and just want a starter property, you should look into an adjustable rate mortgage.
Going to different banks and seeing what they have to offer is also a good idea. Don’t forget to ask about interest rates and terms so you can snag the best deal for you.
8. Know The Perks of Being a First-Time Homebuyer
The good thing about buying your first house is you might be qualified for some perks. You should, of course, verify this with your bank. There are also governmental organizations that offer first-timers certain incentives.
These include lower interest rate on your loans, assistance with down payment, and more flexible down payment options. An FHA loan is one such example.
9. Choose the Right Real Estate Agent
When you’re shopping around for a real estate agent, you don’t really need to look far. You can ask your family and friends for referrals.
Or if they don’t know anyone in the area (let’s say you’re moving to a new city), you can do a search online. The important thing is to make sure your chosen real estate agent is a member of the National Association of Realtors.
You also want to make sure you have a rapport with your agent. Home buying can, as we’ve said earlier, get quite complicated. Having someone on your side whom you can trust will make the process a lot easier.
10. Don’t Forget to Get a Home Inspection
It’s your first house. You’re supposed to feel excited about buying it and moving in. But what if later you find some defect or defects that would need costly repairs?
To avoid nasty surprises, get a home inspection. If they find anything, that gives you leverage to negotiate the sale price. Or if they don’t find anything, you can be even more assured that you’ve made the right choice.
Ready to Buy Your First House?
If you follow our tips, you’ll be better prepared to go house hunting.
For more articles like this, don’t forget to check out our blog and our giveaways. You might just find the best freebies for your first home.