Essential Tips for Buying Your First Home
Are you tired of the noisy neighbors who live upstairs? Tired of living in your parents’ basement or in a cramped room above their garage? Or maybe you want to simply fulfill your dream of owning your own patch and raising a family? Whatever the reason for looking for a home, buying your first home or apartment can be both exciting and terrifying.
Although you could have giddy thoughts of shiny granite countertops and sparkling white picket fences swirling in your head, do not get carried away and be left holding a bill that you cannot afford. Because buying a home is likely to be one of the largest purchases you will ever make in your life, you need to avoid buying on impulse by doing thorough research and by following a few simple tips.
Attend Seminars for Home Buyers
Just as you had to study and learn to operate a car before being allowed behind the wheel, you need to know the basics of how the real estate market works before you buy your first house. Any wrong move you make at this stage could haunt you psychologically for years, wipe out your savings, affect your income and leave you stuck with a home that is unsuitable for your needs. This is why home buyer seminars are so important.
Seminars that target first-time home buyers are organized by several different organizations, which could include city councils or their housing departments. During a seminar, you will receive advice on shopping for your first home, how to finance the purchase, and even tips on how to maintain your home once you have purchased it. What’s more, most of these meetings are free!
Understand How Much You Can Actually Afford
No matter how good the property looks, do not purchase a home you cannot afford. You could convince yourself that all you have to do is live on a little less while you wait for a promotion to come along. But what if the promotion never comes, your employer closes shop or you lose your job? You could be at risk of losing your home and the money you had spent on your house payments. Having your heart set on an overly large and expensive home could leave you disappointed if you did not plan ahead and know what is within your reach.
Prioritize What You Need and Want
Let’s face it: If you are working with a tight budget, you will sometimes have to make compromises. When you understand what you really need in a home, you can then narrow down the options available and have an easier time making your final decision.
Make a checklist of what you need and what you want. Ensure that you include even things that aren’t technically part of the house, but are important to you such as how safe, quiet or walkable the neighborhood is; how easy it is to commute to work; the school system; and how near shopping and entertainment spots are.
Once you have your priorities listed, check them off as you view each house, while you take notes about each property. This list will help you remember and compare what you have seen and identify what you liked or did not like.
Look At the Financing Options Available
Because it is very unlikely that you will pay for your house in cash when you finally close the deal, you will have to look for financing in the form of a mortgage or loan. Taking out a mortgage simply means that you will use some existing property, which could even be the home you plan to buy, as collateral for the money a bank or other lender will give you to purchase your home. This gives your lender the right to take ownership of the property if you do not hold up your end of the bargain.
Carefully consider your long term plans when you are looking at your mortgage options. If you do not plan to purchase another home, you could look at a long-term mortgage of about 30 years at a fixed rate. If, on the other hand, you plan to have this a starter property while you prepare to upscale as your family grows, an adjustable-rate mortgage may be your best option.
Find a Good Real Estate Agent
Your real estate agent will give you the inside track to the world of property buying; a good real estate agent can be an invaluable asset to have when you are purchasing a home for the first time. You need to have someone trustworthy by your side, who is ready to offer sound advice whenever you need it. Your friends, workmates and family could give you the names of good real estate agents that they have used before. Many agents are highly specialized with regard to the location of properties within your city or specific property types, so it is important to find out your real estate agent’s track record with the type of home you are looking to buy.
Have the Home Inspected
Imagine chomping down on what looks to be ripe, succulent fruit, only to find that it is mushy and rotten on the inside. This is definitely not the feeling you want to experience with your new home. For this reason, getting your new home inspected is a must. This allows you to avoid any nasty surprises by looking for what may be hidden behind freshly painted walls or lurking underneath shiny, new floorboards. If the inspector uncovers any major problems, you will be very glad you spent the time and money on the inspection.
Read the Fine Print
After identifying a home you can afford, in a good neighborhood and have had it inspected, you are now on the final stretch. Only your signature on a few papers stands between you and occupation of your first home. However, it is important not to get carried away by your excitement. Ensure that your mortgage broker or real estate agent provides you with a draft copy of the sale agreement and any other related documents for you to preview before you sign. It helps to hire a lawyer to explain any legalese used in the documents and to represent you at the signing.
The Final Word
Following these simple tips makes the process of purchasing your first home less intimidating and more manageable. Although the process is undoubtedly time consuming, stressful and complicated, it helps to think that there are millions of people all over the world who have successfully navigated the entire process.