Buying your first home can be an overwhelming experience. There are many things to think about, from what type of house you want to how much that house should cost. But if you’re ready to start the process, many things can help make it easier for first-time buyers.
Real estate market trends can help you know the best time to buy. If you are a first-time buyer, buying during a seller’s market will mean that prices are at their highest, and competition for houses can be fierce.
If you want to avoid bidding wars and ensure your offer is accepted, waiting until more inventory is in the market may be better.
In this article, we’ll review tips for ensuring your first home purchase goes off without a hitch—and maybe even save some money along the way!
Buy the right house for your needs.
Don’t buy a McMansion if you are only going to use it as a weekend getaway. Don’t buy a tiny apartment when you need space for an office or playroom in case you plan to have kids down the line. And be sure to consider resale value when looking at homes if possible!
Look at maintenance costs and insurance costs (including flood insurance), both of which will add up over time, so try to find not only homes where these bills won’t be too high but also ones that come with some warranty protecting them against issues down the road – these warranties can save lives on occasion!
Get your financial house in order.
First, you must ensure you have enough money for a down payment. The current average down payment on a home is just over 5%, but there are no hard and fast rules about how much is required.
In general, the more expensive your property and the more extensive its square footage, the higher its price will be about what you can afford as a down payment.
If you’re looking at buying an older property with low sq ft or in a poor neighborhood (both of which typically cost less per square foot), it may be wise to put less than 20% down.
Create a home-buying budget.
Before looking at houses, create a budget based on your income and expenses. You will want to include all costs associated with buying a new house—including mortgage payments, taxes, insurance, and maintenance fees—and any costs associated with selling or moving into another home (such as closing costs).
Understand what closing costs are and how they’re broken down.
You should know closing costs and how they’re broken down. Most lenders will include all or most of these fees in their loan application when applying for financing:
- Appraisal (an independent appraisal)
- Survey (to prepare an accurate map and plan)
- Transfer tax (a state or local government fee that applies if you’re moving into another state)
These fees are usually paid in full at closing, but some lenders may require them to be paid in partial payments during escrow—the period between signing your final purchase contract and moving into your new house.
Don’t let yourself be pressured into deciding before you’re ready.
Don’t let yourself be rushed into deciding before you’re ready! You don’t want to buy into something that isn’t right for your family or needs just because it’s the only one available at this time in your life.
Don’t let yourself be pressured into buying a luxurious home with no budget or space constraints just because everyone else is doing it.
And if things about this house aren’t working for YOU—don’t feel obligated by anyone else trying their best not to make them fit YOUR lifestyle (or vice versa).
There are many things to consider when buying a home
It’s easier if you know what you’re looking for upfront and can start researching early.
- What is the budget your looking at?
- If it’s an apartment, how many bedrooms do I need?
- Do I need access to public transportation (for example, if my commute will take more than 30 minutes)?
- Where do you want to live—in the city, suburbs/rural area?
- Is there anything special about this neighborhood (e.g., great schools), neighborhood amenities like parks and playgrounds nearby, etc.?
There you go!
Purchasing a house is one of the most vital financial decisions you’ll make in your lifetime, so it’s essential to do your research and ensure that you have a solid understanding of what goes into making an offer on a particular property.
While there are many things to consider, don’t let yourself be pressured into deciding before you’re ready. If anything about this process feels overwhelming or confusing, remember that there are plenty of helpful resources with tons of information about everything from financing options to closing costs! Good luck!
