A house is probably the single, most expensive thing most people could ever acquire.
Understandably, buying a home comes with its rather sizeable share of stress. Many people consider buying a home the most stressful event they have ever gone through in their lives.
That level of stress is surely going to land heavily on first-time homebuyers. It is common for those buying their first house to be overwhelmed by the experience and end up committing mistakes that end up being so costly in the long run.
If you’re thinking about buying your very first home, here are some tips that will help you navigate (and survive) the entire home buying process.
1. Know What You’re Getting Into
Just as it is your most significant financial investment, buying a home is also poised to become your biggest commitment. Sometimes, buying a house can be an even bigger commitment than marriage for some people.
It’s an expensive one, too. Imagine if you’ve lived as a renter for most of your adult life, paying only, say, $1,300 a month to your landlord. Being a homeowner will jack up that expense to about $2,200 in the form of monthly mortgage payments, which you would be making for decades, depending on your mortgage deal.
You will also have to worry about homeowner’s insurance, property taxes, homeowner’s association fees, and other monthly costs that owning a home entail.
If you’ve finally decided that it’s time to buy a home, you better know exactly what you’re getting into so you can make all the necessary financial and personal preparations for residential real estate transactions.
2. Save Up Early
In all likelihood, you’ll be buying your home with a mortgage. However, for some of the main costs of the actual buying process, you will have to pony up some cash.
The down payment, for example, can cost you a pretty penny. Even if you have excellent credit, which might be able to allow you as little as 3% down payment on, say, a $300,000 house, you still have to come up with $9,000, which could take you some time to save.
Finalizing your mortgage also requires paying certain fees and expenses, which can be anywhere between 2% to 5% of your loan amount.
When you move in, you may also have to spend more money on repairs and upgrades.
That’s why it’s essential to start saving early if you have plans to become a homeowner.
3. Set A Hard Budget and Commit To It
Saving up for a house is one thing. Drawing up a budget is another.
When buying a house, you need to establish what you can afford. You can’t be going around falling in love with certain houses only to have your heart broken because their acquisition price and fixed expenses are outside your ideal price range.
When buying a house, set a hard budget around what you can realistically afford to pay monthly and stick to it.
4. Shop For A Mortgage Lender
Not all mortgage lenders are created equal. Rates, fees, closing costs, and the way they structure their loans may differ.
Aside from costs, mortgage lenders may also differ in their level of customer service and the smoothness of their mortgage process.
Always shop for a mortgage lender and make the necessary comparisons. Do your due diligence and get quotes from at least four lenders. You can ask friends and family about their own mortgage experiences so you can hone in on a lender that will be the right fit for you.
5. Get An Experienced Realtor
The help that an experienced realtor can provide in helping you find the house that’s perfect for you in all respects is invaluable.
A good realtor knows the area where you want to live better than anyone, which ought to save you some time. He or she can also help you negotiate with the seller for a deal that will make all parties involved happy.
Then there’s also the fact that most experienced realtors also count loan officers, real estate attorneys, home inspectors, title companies, and contractors among their contacts, all of whom can be instrumental in the success of your entire home buying experience.
These are just some of the many things you need to do when you’re planning to buy your very first home, but they’re a good enough place to start. Learn what you can about the home buying process to make the whole experience as smooth as possible for you.
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