Purchasing your first home is an exciting, life-changing opportunity, but it needs to be done with careful consideration and planning. Rushing into the buying process can leave you heartbroken and frustrated as you’re trying to navigate through without a plan. Here are 8 things you need to consider, before buying your first home.
Consider the Purchase Price Carefully
It might seem affordable now, that extra $300 every month can add up quickly – leaving you financially strapped in the event something happens. It’s important to budget approximately 30% of your total income into mortgage fees, keeping a realistic expectation on how much you can afford.
Investigate Mortgage Pre-Approval
It’s easier to shop for a house if you know what you’re already qualified for financially. Talking with a mortgage broker can help you get a general idea of how much you’d be able to receive from the bank – so you can look at houses within your preapproval. It’s important to remember, a preapproval does not have to be the amount you use.
Determine the Location and Commute
While the city might decrease the commute time to your job, the closer you look to major cities, the higher the mortgage price tag. It’s important to determine whether a lessened commute is worth the extra monthly premium, or whether it would make a better financial investment to look further away and save a few thousand dollars on your mortgage.
Save as Much as You Can
Saving a large down payment can reduce the overall mortgage amount on your property and save you thousands of dollars in interest every year. Try to ensure you have at least 20% of your ideal home’s value saved up to optimize on interest rates, fees and buying potential.
Don’t Be Afraid to Ask for Help
Many times a professional can make a major difference in your home buying experience—it’s important to ask questions if there’s something you don’t understand. Working with a realtor as well as a real estate attorney is critical. A realtor can help you arrange property viewings, making an offer on the property or even determining a fair market value for any property you’re interested in owning. By having a comprehensive understanding of the areas you’re hoping to move into, a realtor can offer great insight on upcoming neighborhoods or locations. They can also help you understand whether a home is priced fairly for the neighborhood, or whether you can try to reduce the asking price accordingly.
Your real estate attorney will assist with closing. He or she will make sure there are no liens against the property and that all of the legal details are taken care of so you can legally take ownership of your new home.