Buying your first home is an exciting but nerve-wracking time. For most people buying a home is the biggest urchase they’ve ever made, and they want to make sure that they make a smart and affordable choice. If you’re ready to start looking for your first home here are some expert tips that will help you choose a home that will fit your budget and be a smart investment:
Prioritize Your Needs And Wants
One of the biggest mistakes that first home buyers make is not prioritizing their needs and wants. Too many first-time homebuyers end up buying a house that doesn’t function for them because they didn’t prioritize what they need in a home. When it comes to buying your first home, you will probably have to compromise on some things. If you find a home that’s in the perfect location, it might be smaller than you wanted. Alternatively, you might find a home that has the square footage that you want but it’s too far from work, and you don’t want to have a long commute very day. You will have to prioritize the needs that are the most important so that the home you choose will be a home that gives you the function you need.
It can be challenging to separate needs and wants and then prioritize them. It’s helpful to start a running list of equirements and desires and then continue to refine that list as you get further in the home buying process. The more you refine the list, the easier it will be to find the right house for you and your family.
See Past The Finishings
Another common mistake that first time homebuyers make is that they only focus on the finishings in a home and don’t take time to see the potential. A move in ready home with high-end finishings may not be in your budget if you are a first-time home buyer. You also might get better value and square footage from an older home that needs a little upgrading.
Remember that putting in some sweat equity and doing upgrades and projects around the house one at a time can end up saving you money in the purchase price of the house. Also, you will probably want to add your own touches to customize the look of your home. So buying an older home that needs a little upgrading when it comes to finishes could mean getting a more spacious home or a home in a better location. Make sure that you can see the potential in a house even if it needs a little work.
Fix Your Finances First
It is never too soon to start getting your finances in order if you want to buy a home. The sooner you start taking stock of your finances the better off you will be when it comes to buying a home. Make a plan to pay off as much debt as possible and start saving money for closing costs and a down payment. It’s always a good idea to put down as much money as you can on a new house even if you qualify for a loan with no downpayment. Putting money down will get you a better interest rate and over the course of the mortgage will save you thousands of dollars.
Also, make sure that you don’t take on any new debt in the months before you buy a home. You might want to start buying furniture and other items to put in your new home but don’t open new credit accounts, including store accounts.
If you have debt or if you want to raise your credit as much as you can before buying a home talk to a certified financial planner to get professional advice on the best way to get your finances ready to buy a home.
Shop Around For A Mortgage
Interest rates and terms of mortgages vary, so it’s in your best interest to shop around. Factors like your credit score and how much money you have for a down payment will impact the kind of deal available. Get your finances in good shape before you start to shop for a mortgage. Make sure you know the difference between a fixed rate mortgage and an adjustable rate mortgage, so you choose the type that is right for you.
In general, a fixed rate mortgage is the best choice for most homeowners, especially if you’re planning on living in the home for a long time. A fixed rate mortgage has a slightly higher interest rate, but that rate stays fixed for a set amount of time, so you will know exactly how much you will be paying.
An adjustable rate mortgage starts low but the interest rate will balloon over time, and you may end up with a mortgage that you can’t pay if the cost rises and you can’t keep up with it.
Read Home Owners Association (HOA) Rules Carefully
If you want to buy a newer house, you will almost certainly be looking at homes in an HOA community. Some HOA communities are great, but others aren’t. Make sure that you read all the HOA rules and covenants carefully before you consider a home in a particular HOA community. You don’t want to buy a house in a community and find out that the restrictive rules of the HOA are something you can’t live with.
You may decide that you don’t want to live in an HOA community and in that case you need to be sure that your real estate agent knows that so the agent can avoid showing you homes that are in HOA communities.