Buying your first home is a significant milestone. You are finally getting a place to call your own. Things will be different now. No more paying rent. No more running after the landlord to remove that strange-looking mass from the walls. And no more putting off DIY projects for expansion and decor because now you are buying a new home, which will be exactly as you envisioned.
However, before you run off to get your hands on your new house, there are some things you need to be careful of. This is especially important if you’re a first-time homebuyer.
At times, people don’t bother to sit and research before they head out to buy a house. This can result in bad deals and no value for money. Furthermore, you may end up getting a house that has some hidden problems. Hence, knowing these tips for buying your first home can help save the day.
Tips for Buying Your First Home
Following are some things you need to be careful of when buying a house for the first time:
1. Don’t Settle for the First Mortgage Lender
When people are buying a house for the first time, they can get pretty intimidated by mortgage lenders. This is because the borrower thinks lenders have the power to reject you.
However, the truth is that you’re one who’s shopping around for a loan with terms and conditions that suit you. If you have a good credit score, you have nothing to worry about. Take the number they give you and move on to the next lender. Later, you can analyze all the costs and fees and accept the offer you think works best for you.
2. Budget for the Unexpected
When planning your finances, keeping some amount separate for unexpected occurrences is essential. For instance, if you are living on rent currently, give yourself ample time to look for a good house. Often, people make the mistake of budgeting early and switching out their rent payments with their mortgage payments way ahead of time.
Suppose there is a problem detected during an inspection, and you can’t move until it’s solved. In such a case, you would have to make your mortgage payments along with your rent payments until you can move into your new house. Of course, this will cause a dent in the budget because you weren’t prepared for it.
3. Don’t Restrict Yourself to Your Wants
It is vital to keep an open mind when you are looking for a new house. Let loose and broaden your horizon. Restricting yourself to certain specifications will result in having a hard time finding the right house. You can increase your parameters regarding location, the number of rooms, or other aspects because being a little flexible can get you a good house with value for money.
4. Be Prepared to Walk Away from Your Dream Home
Of course, you will eventually find your dream home. That said, it is essential to hold your horses when you do. Dreams do not come true this easily. Find out what you can about the property, get an inspection done, and negotiate before jumping to say, “we will take it!” As first-time home buyers, you must understand that you will probably find a problem in all the homes you visit. Of course, it could be big or small, but in case there is a big issue in your dream home that can cost you a lot, it is better to walk away. You will find another home, and there are plenty out there.
5. Don’t Hesitate in Asking Questions
At times, people often hesitate to ask for too much information about a property. It could be because they do not want to offend the other party. However, you must know that it is your right to ask questions. The seller must answer all your queries regarding the property.
In case they show resistance or seem shady to you, they could be hiding something about the house. An inspection will give you a clearer picture. Furthermore, you must remember that one doesn’t buy a house every day, which is why you must be careful about where you are investing your hard-earned money.
6. Be Mindful of Your Debt to Income Ratio
If you are aware of how a credit score is calculated, you must know that a factor contributing to it is the debt to income ratio. It is also known as the credit utilization ratio. Lenders use this factor to analyze how much of your credit limit you are utilizing (should be under 30%) and whether you can afford to pay back further credit.
However, you must consider your affordability yourself. Buying your first home means you are investing in an asset, but you must also keep in mind that you will have to pay back a loan. Hence, stay within your credit limit and buy a house that doesn’t add to your stress.
7. Don’t Skip the Inspection
People often skip inspection because they want to save money by doing it themselves. Remember, the inspection company allows you to work with a professional who does this for a living. They know how to get into nooks and crannies. Additionally, they also know where most issues are hidden.
You may think you are saving money, but the truth is that spending on an inspection when buying your first home is completely worth it. As mentioned earlier, you are sure to find a couple of problems, big or small, in every house. Hence, it is good to know prior to signing on the dotted line and realizing later that you got the wrong end of the stick.
Wrapping it Up
When buying your first home, the most important thing to consider is that you aren’t taking this step under pressure. It may seem like everyone is getting ahead, but they are all fighting their own battles. Remember to stop and analyze your financial situation and see if you can afford the mortgage before making the decision.
That said when you are spending money on something, you must be vigilant. Follow these tips for buying your first home, do thorough research, be flexible, and spend wisely and you will find the right house with the best value for money.
