Guide to Purchasing Your First Home
If you have never bought a property before, the process can seem intimidating and overwhelming. There are many terms thrown around which may sound foreign, and so much paperwork that you may feel like you’re drowning. However, with the right preparation, you can have a positive experience from start to finish.
How to Determine Your Budget
The first step of buying a home is determining your budget. You will need to know your annual income to start. This will dictate what you can manage for your monthly spending. After all, you won’t just be paying a mortgage. You still have your regular bills and expenses on top of that. Learn about mortgages/tips-for-first-time-homebuyers Down payments can vary from between 5 and 20 percent of the total cost of the home, so you will have to have appropriate savings. There are different kinds of loans you can apply for, so decide if an FHA loan or a 30-year fixed loan works best for you. Look at what the average APR is and factor that into your overall costs. If your rate is over 5 percent, consider another option.
Prepare for Commitment
Unless you are looking to flip the home or refurbish and sell it for a profit, buying a home is a long-term commitment. You need to be prepared for unexpected costs that may pop up along the way. You will need substantial savings for the down payment, but you will also need additional resources if damage occurs to your home. As a homeowner, if something breaks, it is your responsibility to fix it -- that means anything from appliances to house fixtures, like a broken window, leaking roof, or damage from external forces like termites or weather. Additionally, you’ll need funds to pay for property taxes and homeowners insurance, so try to set aside up to 3 percent of the total cost of your home each year. Another good rule of thumb is to spend no more than 36 percent of your total income on repaying your debt.
Think of the Future
You will also be tied to the location you have chosen, so make sure this is a place you can see yourself in decades to come by asking yourself a few questions:
● Are there schools nearby?
● Are there enough employment opportunities so you could get a new job should you be laid off?
● Is there enough culture to keep you sustained in your free time?
● Is it an area that you feel safe and at home in?
● Can you engage in your hobbies here?
● Do you want to have children, and if so, is the home large enough?
If you answered no to any of these, it may be a good idea to not settle until you find what you need to enjoy your home tips-for-first-time-home-buyers. However, you shouldn’t let things that can be easily changed or adapted get in the way. Don’t like the fixtures of the home, but love the price and location? Negotiate for new fixtures, or simply replace them yourself along the way.
Making the Move
When it comes down to moving, start as far in advance as possible. Create a checklist of what you need to accomplish and by when to help make your transition smooth closetbox.com/moving/checklist. Avoid moving during summer, as that will be the most expensive time of year to do so. Start before you think you need to 6-tips-for-a-stress-free-move. This will take the most time, and doing a good job, not a rushed one, will help protect your things. The more possessions you can let go of, the easier your move will be. Get a flat rate from a moving company, and book at least a month in advance. Shop around to see who offers the best deal. It will also save you time and money if you disassemble your furniture yourself.
Don’t be afraid of the amount of work that goes into buying your first home. While there is a lot, it is manageable if you have a plan and prepare in advance. You get the opportunity to create a home for yourself, exactly the way you want.
Image Courtesy of Pixabay.com