Buying a first home is a significant milestone in anyone’s life. There’s a lot to wrap your head around and deal with throughout the whole process. If you’re in the process of purchasing your first house or thinking about it, this article is for you.
Just like any large-scale project, buying a house successfully is dependent on getting all the details right from the very beginning. As we all know, knowledge is power, so the more you know going into this, the better off you’ll be down the line.
Here are some great tips to point you in the right direction when looking to buy your first home:
Set A Budget Early On
You might be tempted to start shopping for a house online immediately, but that isn’t what you should be doing. You’ll only end up looking at houses that are out of your price range and get you nowhere. Of course, this will also make houses in your budget look disappointing. Avoid this altogether by reviewing your finances carefully before anything else. Set a realistic budget so you can figure out how much you can afford to spend on a house.
Talk To Multiple Lenders And Banks
One mistake many first-time buyers tend to make is only speaking to one lender or bank and taking the first mortgage option they find. Shop around and talk to different mortgage brokers. Compare rates, fees, and terms to find the best option for you. Keep in mind that customer service and lender responsiveness are important factors too. Both of these play big roles in making the approval process run more smoothly.
Don’t Drain All Your Savings
Spending all or most of your savings on a down payment and closing costs is a terrible mistake to make. While this might result in lower monthly mortgage payments, it’s not worth living on the edge while trying to save money again.
Instead, try to have three to six months of living expenses in an emergency fund – even after closing on a house. While paying mortgage insurance is not ideal, depleting your emergency money or retirement savings is a risk that should be avoided.
Pay Attention To Neighborhoods
It can be easy getting swept away by the house itself if it checks all your boxes. However, you still need to keep in mind how the neighborhood feels to you and your family. Be careful not to make a decision based only on the property.
Even if you need to compromise on the house slightly, you’ll be better off in the long run in an appropriate neighborhood than if you’d gone for the ‘perfect house’ in one you don’t like. Ask your real estate agent about the neighborhood prior to seeing the house – think about crime rates and the quality of schools if you have kids.
Attend Open Houses In The Neighborhood
Once you’ve found the neighborhood you want to buy in, attend open houses – even if they aren’t an option for you. Doing so will allow you to get a better feel of the area while also learning more about the houses you’ll find there. Once you find a property you love, you’ll know how it compares to others in the neighborhood and thus make a more informed decision.
Get A Home Inspection
The last thing to do before buying a house is to have it inspected. This way, professionals will be able to tell you about any potential problems it may have and you’ll be able to make an informed decision. However, you must keep in mind that not everything is included in a standard home inspection.
Things like mold or pests are not included, for instance. Ideally, you should be there during the inspection. This way, you’ll get a better understanding of the report and get the chance to ask questions throughout the process.