Tips for First-Time Home Buyers

Tips for Buying Home.JPG



1. Pay Off All Debt and Build an Emergency Saving

As stated earlier, homes are costly. The total cost of homeownership includes much more than the price you paid when you bought your house. There are other costs that you must be aware of, and also ensure that you can afford. Homeowners insurance, taxes, maintenance cost & upkeep cost – A/C repair, roof leak, are just but a few. All these other expenses make owning a home more expensive than renting. Although in the long term, owning your own home will be beneficial because it can be an excellent wealth-building tool, doing it right will ensure you reap the benefits of homeownership.

To have peace in the house you are planning to buy, you, therefore, need to make sure you are debt-free and have an emergency fund of three to six months of income in place.

If you are debt-free when you buy your home, you will be in a position of less stress when making your mortgage payment, because you will not have to worry about other payments like auto loan, student loan, or credit card debt.

2. Establish How Much House You Can Afford

This is very important. When shopping for your first home, you need to make sure you are buying what you can afford. Buying the right home will ensure you have financial peace when paying your mortgage. If you buy too much house that you cannot afford, then it will bring you too much stress and pain – that you don’t want.

So before you go out there to start shopping for your home, you need to determine how much home you can afford, you need to work based on your income, and your budget. Experts recommend that the total monthly housing costs, including all the associated expenses maintenance cost, taxes, insurance, etc., should be no more than 25% of your monthly take-home pay.

For example, if your monthly income is $5,000, your recommended housing expenses should not be more than $1250.

There is another rule of thumb that says the amount you spend on buying your home should not be more than 3X your annual income. If for example, your annual salary is $60,000, you should not buy a home that is more than $180,000. This is to ensure you are buying what you can comfortably afford without too much stress, and be able to pay the home off within the shortest time possible. It is not to your benefit to pay a mortgage for 30 years.

3. Hire a professional Realtor

If you are going to need a doctor, you go to a qualified one, not a quack. So also, when you want to buy your home, why trust a non-professional to do the job for you? Again, your home is one of the most expensive investment for most people; it is, therefore, reasonable and beneficial to ensure you have people with the right knowledge on your side when shopping for your home. Make sure you get an experienced Realtor to help you find your dream home and negotiate with the seller on your behalf to ensure you are getting a good deal. Your real estate agent should represent your best interest, helping you make informed decisions and refer you to other professionals like title companies, home inspectors, or any contractor you may need to ensure that the property is in good condition before you can finally move in.

4. See multiple homes

Now that you have a professional Realtor on your side, you should provide clear instruction in terms of location where you want to buy, when you want to buy, what you can buy, specification (2 bed/3 bed/4 bed etc). You should have an idea about school ratings in the area, the crime level, and so on.

It’s also a good idea to drive through neighborhoods you want to live in to get to know the environment and familiarize yourself with the terrain. You should try and have a sense of your commute times to ensure they are satisfactory. Visit the neighborhood at different times and days to check for traffic conditions, noise levels, and look around the neighborhood to make sure you will be comfortable there. Only choose a community that you and your family feel good about and will be comfortable to live in.

5. Make an offer & Prepare for closing

By now, you must realize that the home buying process is nerve-racking. Look at everything you have to do before you can get to the final step.

But you’ve got to do it right so that you can enjoy the house because you and your family will be spending a lot of time in the house. We want to make sure it’s the right one for you.

So now, you need to request a home inspection. I know you’ve seen the outside of the property, you have familiarized yourself with the neighborhood, but you still need a professional home inspector to examine the structural conditions (inside and out), of the property.

The home inspection will include foundation check, roof, attic space, exterior checks, electrical panels, light switches, power outlets, water heater, thermostat and heating, cooling, and ventilation.

They will also check all your plumbing to make sure everything is in good working condition. You don’t want to get to your new house and immediately start repairing stuff.

If the inspection report came out, and everything looks good to your satisfaction. Then you should make an offer. You can get the guidance of your agent on what he/she considers competitive and fair value on the home. If your offer was accepted, then you go to the final step – You close, sign the agreement.

The closing is the last step before you will be given the key to your new property.

Closing is when you sign the contract, and assume ownership of the property.

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