You are ready to buy your first home. You have a stable job, money saved aside, and your credit score is good. Now it is time to go out and get your dream home. This moment is an exciting, emotional, and critical moment of your life and your partner’s life (in case you have one). Buying a home is one of the most vital steps that adults take in their lives and a rewarding financial step towards achieving stability in your life, but it is a long-term commitment. You should consider some significant points that can help you buy the right house and be prepared for any situation that may happen as a future homeowner.
Buying a Home is a Long-term Commitment
Much like a marriage, buying your house is a long-term commitment. For better or for worse, in sickness and in health, that mortgage payment must be made every month; therefore, you should have expert professionals to help you with the planning and buying of your house.
- Financial Planning. – Planning your finances should be your priority before you commit to a mortgage payment. Plan your income vs. your expenses. Also, have a plan in case you or your partner get sick and cannot work for a while, or any situation that can affect making that monthly mortgage payment. Talking with a bookkeeper can help you significantly.
- Hire an Experienced Realtor. – Unless you have years of experience in buying and selling homes, find yourself a good realtor. Your realtor will not cost you anything because the home seller is the one paying their fees. A realtor can help you find the right house, at the right price, in the right place.
- Find an Experienced Mortgage Broker. – Why not a mortgage lender, you ask? Because a mortgage broker can offer you an independent opinion and different options. Typically a mortgage broker has different platforms to meet the needs of each and every borrower; however, a mortgage lender can only offer you one. By having options, you have a better chance to find the mortgage type that will suit your long-term needs.
Choosing Your First Home
A smart proverb once said that looks could be deceiving. This proverb could not apply better to any other situation than when buying your home for the first time. There are some essential factors you should consider besides just the looks of your future home.
- Look Beyond the Cosmetics – When walking through a prospect home, look beyond the paint and the decoration. As any good seller, the home seller wants to hide the imperfections and show you only the pretty side of its home. This concept also applies if the house does not have good cosmetics but have a suitable structure.
- Look for the Real Value of a Home. – A good realtor can help you know the home market trends in any specific area and should be able to give you an insight of future market prices. Also, make sure you know any community plans, like a new school, new commercial sites or anything that can make that property more or less desirable in the future.
- New Home vs. Pre-Occupied Home. – New homes can be great because they are new; however, they come with a higher price that will depreciate quickly. A local market comparison is crucial. Ask your realtor to give you a printout or email you all his findings. Do not get verbal information only, because you will end up forgetting what was said.
After You Move into Your First Home
You have finally moved into your new home, and your house looks empty. You cannot wait to go shopping for furniture and start painting and decorating your new place, right? Wrong! Do not dive too fast into unnecessary spending yet.
- Do not Spend Your Money on Decorating. – Unless you had already saved money for home decoration (separate from your emergency funds), your emergency funds should not be touched unless there is an emergency like sickness or death. Do not worry about decorating right away. You will have plenty of time to decorate your home. Many first-time home buyers make the mistake of spending their emergency funds on home decoration.
- Save for Repairs. – Even when you buy a newly built home, things can break, and the builder or home warranties do not offer warranty for everything. This aspect is even more crucial when you are buying a pre-occupied home. The home inspection you get during your home-buying process will only detect broken things around the house but cannot tell you about the things that will break.
- Choose the Right Home-Improvement. – If home-improvement or renovation is part of your plans when moving into your home, make sure you are choosing the right improvements to make. Some home-improvements pay-off and some do not. Cosmetic-type improvements usually do not pay-off; however, functional-type improvements do. For example, granite counter-tops will increase the chances to sell your home but will not raise the price of your home.
The rewards for buying your first-time home are many. The most significant one is the emotional stability that can bring you and your loved ones. However, it is a step in your life that will need commitment, preparation, and discipline. Because it is also an emotional time, your judgment can get clouded, so make sure to arm yourself with knowledge and with experienced professionals like a bookkeeper or accountant, a realtor, and a mortgage specialist.
Are you ready to take this exciting new step in your life? Let us get together and help you with any question or concern you may have about buying your new home. We have the experience and knowledge you need for this valuable time in your life.
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H.G.T.V. (n.d.). Which Home Improvements Pay Off? H.G.T.V.