Moving into your first home can be both an exciting and intimidating process. Getting to the point of moving in can be quite the process, especially when you aren’t sure what you need to do to make the right decision. This guide will help you to make an informed decision as you shop around for your very first home.
Don’t Rush Into Anything
Before getting into the weeds, it’s important to note that the last thing you want to do is make a split-second decision. Buying a home is a long-term, high-cost decision considered by many to be one of the biggest you’ll make in your lifetime. Take your plenty of time for consideration.
Look at Your Credit Score
It takes some planning ahead but it’s often crucial to make sure your credit is in good standing. This is used by every lender to determine not only if they will lend to you for your new home, but how much interest you’ll be charged as well.
For example, if your credit score is low, you are seen as being at a higher risk of defaulting on a mortgage loan. As such their interest rates are typically much higher.
It’s also worthwhile to check your credit report for any errors that could affect your credit. If you see any, report them to the major credit agencies – Experian, TransUnion, and Equifax – to get them corrected.
It can be overwhelming to simply look up houses for sale with no idea of the area you want to live in. So, consider the location you want to live in to narrow down your options before you start.
A good way to start narrowing location is where you need to get to quickly most often. Many people start by looking for homes reasonably close to their jobs or schools if they have or want to have children.
It’s also a good idea to consider the landscape you want to live in. Do you want plenty of space in the country or the bustle of the city?
When looking at possibilities, keep in mind what you need. Note that it’s important to consider absolute needs first. This might include a bedroom for everyone in the home. Then, consider your budget – which we will get into shortly. If your budget allows, you can take a look at wants in the home such as a screened-in porch or extra bathroom.
Consider Your Budget
A rather obvious point whose importance can’t be stressed enough is the cost of buying a home. The last thing you want is to be locked into a mortgage that you can’t afford.
When considering your budget, remember not to just consider if you make enough to pay monthly payments. You’ll want to consider other bills and purchases throughout the month such as groceries and electric bills.
It’s also critical to keep in mind that property taxes will be added onto your purchase as well. In addition, look into how these taxes are charged to you. Do you pay them each month? Are they covered in a yearly sum?
When you are moving to a new area, you should also keep in mind the cost of living there. If your costs such as groceries will change, this will affect your budget for monthly mortgage and other homeowner expenses.
Get a Professional Home Inspection Before Closing
In most states, the real estate agent or previous homeowner is required to disclose anything wrong or potentially wrong with the property being sold. Unfortunately, despite these regulations, this isn’t always done.
The last thing you want is to move into a home only to find out a few months in that there are fundamental or structural problems that can add unexpected costs. Spending the extra $300 to $600 to have the house inspected can be well worth it in the end.
Have Everything in Writing
As you navigate your way through discussing a home, make sure you get everything about the discussions and deal in writing. This is a way to protect yourself against any discrepancies that you run across in closing the deal.
You will run into a lot of legal and real estate jargon that you might not be familiar with. There are two ways you can protect yourself during real estate deal discussions.
First, it’s a good idea to try and educate yourself as well as ask plenty of questions. An even better idea, if possible, is to work with a buyer’s broker. A buyer’s broker helps to navigate deals on the buyer’s behalf rather than a real estate agent who has the seller’s interest in mind.
Buying your first home can be a stressful exercise. With these tips, though, you’re more prepared to make a decision and settle into your new home.