The challenge of buying a home for the
first time can seem so daunting that it’s tempting to either just go with the
first house that falls in your price range or continue to rent. Here are a few
things that you will need to consider before you buy, what you can expect from
the buying process itself.
Considerations before you buy
The first thing you’ll need to determine
is what your long-term goals are and then how home ownership fits in with those
plans. It could be that you’re simply looking to transform all those “wasted”
rent payments into mortgage payments that actually give you something tangible.
Others see home ownership as a sign of their independence and enjoy the idea of
being their own landlord. Narrowing down your big-picture homeownership goals
will point you in the right direction. Here are a few questions to ask
What type of home best suits your needs?
You have several options when purchasing
a residential property: A traditional single-family home, a townhouse, a condo,
or a multi-family building with two to four units. Each option has its pros and
cons, depending on your homeownership goals, so you need to decide which type
of property will help you reach those goals. You can also save on the purchase
price in any category by choosing a fixer-upper, although the amount of time,
sweat equity and money involved to turn a fixer-upper into your dream home
might be much more than you bargained for
What specific features will your ideal
While it’s good to retain some
flexibility in this list, you’re making perhaps the biggest purchase of your
life, and you deserve to have that purchase fit both your needs and wants as
closely as possible. Your list should include basic desires, like neighborhood
and size, all the way down to smaller details like bathroom layout and a
kitchen that comes with trustworthy appliances.
How much mortgage do you qualify for?
Before you start shopping, it’s
important to get an idea of how much a lender will actually be willing to give
you to purchase your first home. You may think you can afford a $300,000 home,
but lenders may think you’re only good for $200,000 depending on factors like
how much other debt you have, your monthly income and how long you’ve been at
your current job.
How much home can you actually afford?
On the other hand, sometimes a bank will
give you a loan for more house than you really want to pay for. Just like with
the purchase of a new car, you’ll want to look at the house’s total cost, not
just the monthly payment. Of course, looking at the monthly payment is also
important, along with how much down payment you can afford, how high the
property taxes are in your chosen neighborhood, how much insurance will cost,
how much you anticipate spending to maintain or improve the house, and how much
your closing costs will be.
Who will help you find a home and guide
you through the purchase?
A real estate agent will help you locate
homes that meet your needs and are in your price range, then meet with you to
view those homes. Once you’ve chosen a home to buy, these professionals can
assist you in negotiating the entire purchase process, including making an
offer, getting a loan and completing paperwork. A good real estate agent’s
expertise can protect you from any pitfalls you might encounter during the
Carrie Colby owns Premiere Properties in