For many people, buying their first home is a major milestone in their life; you may feel like real grown-up for the first time. You have decided to put down roots somewhere and that is a big step for many people. This exciting time can also be one full of anxiety and overwhelm. This is the biggest financial commitment you will ever make and here are some tips for buying your first home.
What are Your Priorities?
Buying the wrong house is not as easy a fix as many of the other purchases we make. Some careful thought regarding what you want and need in a house will set the stage for a more focused, successful search. What sort of design do you like? How much space do you need? Are you planning on having children? How averse are you to a long commute—many people have noted this as a top stressor in their life, so think carefully about this one. Make a list of things you must have and things you would really want, but are not necessary. If you are buying a home with another person, make your own lists and compare.
Figuring Out How Much House You Can Afford
You give a lender some figures about your income, debt and the like; he tells you how much of a mortgage you can qualify for. Do not just take this number and run. Depending on your desired lifestyle, other goals you may have for yourself that require money to achieve, and other expenses not calculated in a pre-qualification, you may not be able to truly afford a mortgage that size; or you may not simply want to put that much money towards a house at the expense of other things. Do some serious calculations and track your spending to see where your money is going. This will give you a better idea of what you can truly afford. Once you have an idea, start saving the difference between your rent and your proposed mortgage to get more comfortable with a larger house payment.
If you are open to a variety of locations, you may want to look at mortgage rates in different areas; If you live in Canada, for example, know that rates in Alberta are on their way down, and buying a home here compared to another area in the country can make a significant impact on your finances.
Do Your Homework
In the age of the internet, all the information you could possibly need to guide your purchasing decision is available right at your fingertips. You can find out everything you need to know about a neighborhood, its school systems, crime statistics and its home values. Many listing sites have detailed information about the homes for sale, such as the layout and size. Really take a look at the community; talk to neighbors to get that juicy ‘’off the record’’ type information that will give you some valuable insight into the home and the surrounding area.
Kelli Cooper is a freelance writer who blogs about all things real estate.