The first time you buy a home it is unlike anything you have been through before. The financing, shopping, and spending are on scales unlike any purchase you have so far. That’s why it’s important to make sure you get a good headstart on the process, to make the experience as pleasant as possible.
Here are 8 key steps to buying a house for the first time.
Make sure you have money set aside for a down payment. Usually a 20% downpayment is required, but you can get by with as little as 3% depending on your credit history. However, anything less than 20% usually requires you to pay insurance to cover the difference (included in your monthly mortgage) and it also may affect your interest rate. Talk with one of our home loan specialists for more info.
Budget for all the other expenses as well. There are a lot of fees that go along with buying a house beyond the mortgage and down payment. You also need to consider moving costs as well as any work you want to do before you move in, and furniture.
Buy for the future. Remember, you’ll be living in that neighborhood for years to come, so make sure it meets your priorities - i.e., schools, shopping, safety, traffic, convenience, etc.
No house is a perfect home. Decide where you can compromise and where you can’t. No house is perfect but you should decide on what you absolutely need to make a house your home.
Get a home inspection. Few home buyers — especially first-time home buyers — know all there is to look for when buying a house. Hiring a licensed home inspector is a crucial step in making sure the house you want to buy doesn’t have any nasty surprises hidden in a wall, basement or attic.
Stick to your budget. Use a mortgage calculator to see what kind of house you can afford and then stick to that number. Don’t get sucked into a bidding war on a property and end up spending beyond your budget.
Figure out your mortgage options. There are a number of various ways to finance your house. Talk to a home loan specialist or run the different scenarios in a mortgage calculator to see what appeals to you.
“Live” in the neighborhood. When you find a neighborhood that seems right, visit it. Go in the morning, afternoon and evening. Do a practice commute or grocery run.
If you found this information helpful, you may also want to check out these articles:
- Preparing to Buy A New House
- Improving Your Credit for a Mortgage
- How to Choose the Right Mortgage Lender
- How Much Mortgage Can You Really Afford?
Lost? Contact us for a reliable guide through the home buying process.