Don’t let anyone tell you otherwise: buying your first home is a major accomplishment. The thrill, the feeling of impending ownership, and everything in between are all part of the journey.
Homeownership gives your family stability and security. It’s also a bet on your future equity, which will grow the longer you stay in your home. With rental costs increasing across the country, purchasing a home has become a more attractive option.
Of course, buying a new abode is a big investment that will require a hard look at your current and long-term finances. You may have to commit to a new, more rigorous savings plan or defer other expenses like buying a new car. But the thrill, joy, and relief that come with homeownership make up for it.
Advice for First-Time Homebuyers
The allure of becoming a homeowner is no doubt exciting and momentous. However, you should also be mindful of buying a house that makes sense for your family’s circumstances. Often, this consideration requires you to do homework and properly analyze options before signing on the dotted line. To make this process easier, here are a few tips:
Be Prepared to Commit to a Loan
The best advice for any first-time homebuyer is to be prepared. For starters, did you know the average mortgage length is typically 15 to 30 years? Even if you don’t intend to stay in your home that long, buying a house is a major financial investment. Make sure you’re financially ready to be a homeowner before accepting a mortgage.
- “Am I willing to make a five-year commitment to this house and city?”
- “Is my emergency fund large enough to survive at least three months?”
- “Am I willing and able to make financial and spending changes to fit this new stage of my life?”
Being able to answer these and other important questions can help determine if you’re ready to purchase a home.
Determine Your Budget and Stick to It
Several criteria, such as the size of your down payment, the mortgage programs you use, and your credit score, will help determine your budget size. As such, it’s critical to define your budget’s scope and keep to it. Remember to account for “invisible” housing costs like maintenance fees and property taxes. These expenses should be considered in the total budget.
As someone looking to become a first-time homeowner, it no doubt can be tempting to start looking at listings in your preferred area. However, there are some crucial steps to take before you start viewing properties — and getting preapproved for a mortgage is at the top of the list.
A lender’s mortgage preapproval letter outlines the funds you can borrow. Essentially, it outlines the loan boundaries and helps you know how much you can afford. It’s based on your financial information, including W-2s, bank statements, and your credit score. A preapproval letter informs a seller that you have the financial resources to purchase the property.
Consult a Real Estate Agent
Real estate agents will help you find properties that meet your needs and are within your budget. Then, they will meet with you to tour those options. Most of the time, it’s preferable to hire a top real estate agent who is familiar with the houses in your desired neighborhoods of major cities like Denver, Phoenix, Las Vegas, Austin, and more. Indeed, the best Realtors are familiar with the nuances of your area and can assist you in avoiding major problems.
Welcome to the Neighborhood!
If you’ve already checked off the last item on this list of tips, then hearty congratulations are in order. You’re about to embark on an exciting and worthwhile endeavor, and that is certainly impressive. If you still have some work to do, there’s no shame in that; after all, it takes a major effort to start this process. Buying your first home is an exciting time. We hope these tips help you find your perfect house. Cheers!