Buying your first home is an exciting time. Still, purchasing one can be a big step and a bit overwhelming. However, there are some planning strategies that that will help make the whole process easier. Here are a number of them:
1) What Kind of Home?
There are so many houses to choose from. The real question is what kind of a home are you looking for. Each one of these type homes will have its pros and cons depending on its location and your lifestyle.
There are other options as well. If you are handy a fixer upper might be right for you. Whatever type home you choose, be sure to understand all the issues involved in each type of home. Doing research can really pay off in the end.
It is important to plan savings for not only the down payment but for the closing costs as well. Even after the purchase, continue saving for the expenses of owning your own home. For example, all the repairs are yours to take care of. When the sink leaks or the appliances need repair, you have to absorb all the costs.
3) Stay Below Your Budget
How much house can you afford? This is of course based on your credit and your income. Even if you think you have good credit, be sure to check it with a credit reporting agency. These agencies can figure out what kind of house you can afford with just a quick review.
Be sure to understand the loan options that the lender is discussing. If you want a steady payment for the life of the loan, you need a fixed rate mortgage. If you do decide on a variable note, make sure you can still afford the payment if the interest rate goes up the max number of points. Another option is to take out a home equity line of credit (HELOC), which offers interest rates that are typically lower than a standard credit card.
Now that you know what you can afford, take a good look at what you really feel comfortable with. Just because they say you can afford a house for $350,000 doesn’t mean you need to spend that much.
4) Settle on a Monthly Payment
When determining if the monthly payment is something you can live with, remember that insurance and taxes can almost double the amount of a monthly payment. Finding the taxes on homes is fairly easy, though determining what the insurance cost can be a little trickier. Contact an agent and get a quote for some of the homes you are considering.
5) Figure Out What You Want
Remember that having a good idea of what you want in a house (as far as features go) can really keep you on track to get the house you will be happy with. If you are looking for a big lawn with a garden, want a guest house/room or a dining room that can host a large party, be sure and keep this list with you when talking to a local reality agent.
6) Get Someone Who Listens to All the Above
Having a reality agent who listens to what you want and what you need in your first home is an important part of the process. If you start out with an agent who you just don’t feel quite comfortable with, there is nothing wrong with changing to one that is suited for your needs.
Buying your first home is an exciting and fun time. By planning ahead and having all the information you need, you can have a more pleasant experience while shopping around.
My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.