Buying a house for the first time is exciting but at the same time it can be stressful and time-consuming. It is also the most important purchase of your life and you would not want to make any mistakes during its process.
Every decision you take towards buying a home must be executed after lots of planning, research and calculations.
Here, we have prepared a beginner’s list of few ideas for people who are buying a house for the first time.
1. Clear Your Debts and Start Saving
After you are debt-free, it is now time to start saving for your down payment or any other unexpected expenses that may come your way before the big purchase.
Typically, lenders ask for a down payment ranging from 5% to 20% and the bigger your down payment is, the cheaper your loan and the monthly payment will be.
The easiest way to save for your down payment or any other house-related expense is to transfer a fixed amount into a savings account each month.
2. Make A Realistic Budget
Before you look for your dream house it is important to know how much you can afford and be realistic with the price range. Determine the maximum monthly payment you can afford and make a budget which includes your property taxes, mortgage insurance, maintenance costs etc.
Your budget should also have enough room for other fixed expenses like water, electricity, flooring and others. After planning your budget still loyal to it and keep it in your mind while house-hunting and shopping for the house. Staying in limits of your budget will make sure that you don’t spend all your money on a house or have to pay for a mortgage which you can’t afford.
3. Hire An Experienced Local Agent
If you’ve decided your location it’s now time to hire a real estate agent from that area. You must make sure that your agent has worked before in your desired location so you could ask him about the number of houses he sold in that area and inquire about the local services of that area.
A good agent is the one who has the exact information about the area and its people. It is important that you hire an agent from a licensed firm and that the agent is authorized to serve your best interests. Look for companies in your location like the Sunnyside Title Company, which is a fully licensed agency aiming to provide licensed and titled real estate professionals. You can do your research before employing an agent or take suggestions from people who’ve bought houses from a real estate agent.
The important thing is that you must speak openly and clearly with your agent so they can deliver you with exactly what you want.
4. Get Preapproved for a Loan
Getting pre-approved for a loan determines if you’ve met the lender’s conditions to attain a home loan and how much amount a lender can give you, its rates and monthly repayments. It’s a significant step in finding out if you can get the required financial support for your house.
Pre-approval requires you to submit a preliminary loan application to a lender or a bank to evaluate your credit score, debts, employment history, income, and other factors which in turn will tell you what loans are available to you so you can choose wisely keeping your budget in mind.
Most sellers prefer buyers who have a written approval letter from their lender’s stating that the buyer is eligible to receive the financing to close the deal.
5. Research Your Neighborhood
If you wish to live in a neighborhood for a long time then it’s important that you examine it completely because nobody wants to buy a house and then find out that the nearby train makes too much noise or if the neighbors have a dog who barks into the night.
You should visit the neighborhood at different times for several days. You could go on a casual walk, or even take the bus or train to the area and find out if the neighbors spend more time indoors or outdoors.
You can ask your agent to get other information about the neighborhood like its crime and theft rates, the quality of schools and transport services. Choose a locality about which you and your family feel good and are comfortable with.
6. Attend Open Houses
An open house is when a house is for sale and all visitors are welcome in it to look around before purchasing.
After deciding your neighborhood it’s suggested that you attend open houses of that area. Even if the house which is on sale isn’t what you want, it would assist you in understanding more about the location and its people who could be your potential neighbors.
Attending open houses gives you a benefit when you do find a house which you love and is in your budget to compare it to the previous houses and whether your house is better or worse compared to the other neighborhood houses.
7. Be Prepared for Closing Costs
After the deal is done and the property name is to be transferred to the buyer you may incur many closing costs. If you don’t determine the cost of closing in your savings, it is possible that certain financial problems may occur. Therefore, it is important that you save for closing costs so you don’t have to take another loan for it and then spending the beginning of your days in your new house by repaying the borrowed money.
The closing procedure usually takes 43 days or so and during that time it is important that you ask your real estate agent to explain everything to you in detail before you sign the official contract.
8. Conduct A Home Inspection
The most common mistake buyer’s make is to not perform a home inspection before making the final home agreement. A home inspection is performed after the offer is accepted or can be included in the offer after negotiating with the seller. This determines the condition of your house from inside and out and you must be thorough with it.
The inspection must check for mould, pests or rat infestation and scan the entire house including the attic, the roof or even the smallest of spaces.
It is best if you attend the inspection and supervise it carefully and in detail as per your preference as it’s better to be safe than sorry.
9. List Out Your Non-Negotiables
Before making any life-altering decisions we have a list of things which we cannot compromise. The same applies to when you’re buying a house.
Many things are negotiated with the seller during the home buying process which results in your savings. But there are many things which are non-negotiable like, the size of the house, the number of rooms, your budget, schools nearby, transport facilities and many more.
Buyers who make a list of things which can be negotiated and which cannot be negotiated during the home buying process find it easier to discover their ideal property.
10. Buy the Best Home Insurance
It is stupid if you buy a house without a home insurance, considering the fact that so many expected costs are incurred in just setting up the house. Then how can you ignore the possibility of unexpected costs which could occur at any given time like, property damage, theft or vandalism, frozen plumbing and many more?
Purchasing the best home insurance before closing your contract on the house keeps you prepared to cover those costs.
All the above pointers must be considered when you’re purchasing a home for the first time to ensure your process from start to end is smooth and well-planned.