So you are on the verge of buying your first home.
Congratulations to you!
Well, buying a home is one of the top most priorities of an individual.
Buying a Home is really a “Big Dream” and more so when you are a first time home buyer.
However, the process of buying a home is long and often too ambiguous.
You need to be careful in order to get the best deal for yourself.
In fact, buying a home is a major decision as it involves lots of your money. You just cannot afford complacency on your part when you go out buying your first home. In most of the cases, there would be no second chance, and moreover, you cannot just reverse your decision once you have purchased a home. Buying your first-home perhaps can be the biggest purchase decision of your life and so you just can’t afford to regret your bad decision.
However, it has been seen that people do not spend time learning how to buy a home.
They would rather spent time in making various kinds of online purchases but simply miss out on what they need to follow in order to make a great first time home purchase.
You have to realize that buying your first home is a major investment decision for yourself and a life changing one too. Ultimately you should not regret your decision. Rather you should feel that you have made the right decision.
Here, I have listed some very important steps you should follow when you are buying your first home.
So let us see What First Time Home Buyers Need to Follow.
Compare Home Prices
Pricing matters and it is a “big” factor when you go about buying your first home. Slight effort on your part could save you hundreds and thousands of dollars. So, when you are buying your first home make sure that you compare home prices before making “the final decision”. You simply have to check out the selling prices of homes in the areas where you would like to have your new home.
However, you should only check out the prices of comparable homes. There are many websites, which list down home rates. For instance, you can access sites such as Homegain and Zillow which can provide you pricing details of homes in various areas of your city. You can also get home pricing information from National Association of Realtors.
Prepare a Budget
Well, Budgeting is an integral part of any sort of personal financial planning. If you want to take the crucial decision of buying your first home, you invariably need to prepare your budget. For this, you need to understand what your monthly cash flows are. You have to know what your overall monthly earnings are and have to figure out how much you are spending in order to ascertain your actual savings. The monthly savings figure will determine how much installment you can afford to pay towards your home loan.
So, if you are looking for four rooms set apartment for yourself, you have to revise your strategy if you cannot afford to pay for its monthly installments and hence have to look for a smaller apartment instead. Moreover, you should know your total budget as buying a home involves more than just the monthly mortgage payments. There is the initial down payment and taxes, as well. Then you may also have to set up a budget for furnishing or some post move expenses. Once you know your budget, you get the clarity about your affordability and so can easily finalize a home or apartment which you can afford.
Note down Your Priorities
Each person has its own set of priorities with respect to purchasing their “dream” home. So you should too decide about your priorities. Moreover, you should note down your priorities. Your preferences should be clearly laid out. That is to say that the picture of your “dream home” should be clear in your mind.
You should know what is important for you.
Maybe you want a big dining room in your house. If it is so, then do note it down. It may be so that you desire having proximity to shops and services. You may require a nearby hospital, a shopping complex, or some other service. It is essential to note them down so that your final selection is based upon the parameters laid down by you. Once the priorities are met, you can go forward and can say “yes” to that dream home of yours.
Once you have prepared your budget, listed down your priorities, and finalized the “dream home” for yourself, its time you find a bank who is willing to give you mortgage for your first-home.
So start looking for appropriate lenders for getting pre-approvals for a mortgage or home loan. This way you can get over financial hurdle with respect to the purchase of your first home.
You can begin by searching for reputed lenders in your locality. It can be nationalized banks, regional banks, mortgage brokers, credit union or local lenders. Get estimates for their rates and payments and then finalize the lender for getting pre-approvals.
You have to provide them with details of your credit, income, as well as assets so that the lender may start the process of pre-approval.
The process might take few days, and you finally get to know how much loan you can get from your lender for your first home purchase. With pre-approvals, you can come to know exactly how costly home you can afford to buy.
Make Down-Payment as Much as Possible
This is quite simple to understand. A larger down-payment means that you eventually have to pay lesser money towards your monthly home loan installment. Moreover, a large down payment eliminates the need to have private mortgage insurance. However, you should have saved enough in order to make a large sum of down-payment towards your home loan. Having said that the general trend is 20% as down-payment. The bottom line is crystal clear with the facts that make down payments as much as possible. So don’t shy away from making large down payment. It will help in reducing the burden of loan on your shoulders.
Allocate For Post-Move Expenses
Invariably, you need to make provision for unexpected expenses that may arise once you move-in to your newly acquired home. Chances are high that you may face unexpected situations once you move in. In reality atleast, 99 out of 100 people face difficulties when they move to their new possession. It may happen that you require replacing the water heater, requiring doing some patch work or replacing the broken glasses. There can be a number of such situations. The only remedy is that you should be ready with some money to deal with such situations. So allocate for post-move expenses.
Make Improvements before Finally Moving In
If your new home requires any sort of improvements, make sure to do them before you finally move in. It would be quite difficult and annoying to make improvements once you have checked in your new home. It may happen that you eventually miss out doing the improvements for your house and so have to bear the inconvenience. So ensure you make improvements before finally moving in.
Read the Paperwork
Mortgage documents are very important. You have to ensure that you understand every term and condition listed in it. So carefully read all the paper work given to you. Make it a point to read everything. If you happen to face any difficult in comprehending the points listed in the documents, you should definitely contact an expert or can hire the services of a real estate consultant. Reading the paperwork, you become aware of your rights and responsibilities in relation to mortgage contract that you have with your lender.
So, if you too have decided to buy your first home you can follow the above points in order to ensure that you eventually succeed in getting your “dream home” and that too without facing any difficulty whatsoever. Buying a first-home is a major investment decision and it is your responsibility to make it succeed. The above post on What First Time Home Buyers Need to follow aptly describes what you have to do in order to ensure that you have your “dream home” without any problem.