Buying your first home might be a big next step in your life, but it can also be daunting and confusing.
Think about it. This could be the biggest purchase you ever make in your life, and you have no relatable experience to help you out. That’s why you need to make sure you spend enough time preparing yourself and your finances before you start house shopping.
These five tips will get you started and show you how to make the process of buying a house an easy one.
1. Don’t Buy a Home Before You’re Ready
Owning a home can be expensive, but it’s also a big commitment. Before you buy your first house, you have to make sure you’re both financially and emotionally prepared.
For example, you could pay a lot more for housing expenses per month when you own a home as opposed to renting a home. Just because you can afford to rent a home doesn’t mean you can afford to buy one.
You won’t just be paying for your mortgage. You’ll also have to pay for property taxes, HOA fees, homeowners insurance, etc. Make sure you understand everything you’ll have to pay before you buy a house.
Think about where you are in your life before you decide to buy. Do you have enough cash for a down payment? After a down payment, do you have enough left over for closing costs? Are you ready to settle down in one spot?
If you don’t have this kind of cash and or know you’ll have to move again in a few years, you might want to wait.
2. Prepare Your Financial Situation
You should meet with several mortgage brokers and banks before buying your first home. In fact, you should do this early on in the process. This’ll give you an idea of how much you can spend on a home and how much cash you’ll need.
There are some real estate agents who won’t sell homes to people who don’t have a pre-approved mortgage.
But don’t just borrow money because you can. It might not be a good idea to take out the full amound of a loan the bank offers. Figure out what is best for you and your situation.
3. Don’t Spend All Your Cash
Though you’ll have to pay a down payment and closing costs, you should never spend all your cash on these expenses.
Odds are, you’ll face unexpected problems once you move into the house that’ll take some money to resolve. You may have to make some last minute repairs, put in some new locks, or provide a utility deposit.
Besides, don’t forget about the move itself. Moving takes money, so make sure you have enough left over.
4. Hire an Agent
You don’t have to hire an agent to buy a house, but it’s always a good idea, especially if you’ve never purchased a house before. A good real estate agent will be able to find you a house that meets your needs and help you negotiate an offer.
Doing these things on your own can be confusing if you don’t know how to go about the process.
5. Get the Home Inspected
A home inspection can make you aware of problems or repairs you didn’t realize were there. So it’s a good idea to get the home inspected before you buy it. In some cases, the seller will make the repairs for you.
This isn’t always the case. A seller isn’t obligated to make needed repairs. But if they don’t want to lose the sale, they may take care of the problems for you.
The inspection in mostly for your own education. It will let you know what you’re getting into before you buy the home.
Buying Your First Home
Before buying your first home, give yourself some time to evaluate your current and future living needs. If you aren’t planning to relocate to a new area and can afford it, you might be ready to buy a house. If you don’t have the cash on hand, it might be a better idea to wait another year or two.