What to Know Before Buying your First Home
Buying a home for the first time is exciting. This big step in life needs thorough preparation. At one given point there are usually many homes in the market. It calls upon you to discuss with your realtor what space and neighborhood you desire to live in, and for what price. Before committing to buy a home, envisage how your life might pan out in the next five years.
Size and location
Between location and size, what is of prime importance to you? You can either choose to buy a small house in your favorite part of the city, or a big house further from the city but at an affordable cost. If you plan on growing your family shortly, then the big home in a suburb might serve you right.
A home is a long-term investment. You don’t want to buy and sell it in less than five years; it is financially unwise. So before buying that new home think again where your career is going to take you. In case you don’t get to live in your home for five years, consider renting out instead of trying to sell it shortly after purchasing.
Do a thorough inspection
A home inspection before purchase helps to unearth the beautiful and the ugly details. You can get the seller to repair the defects you spot during the inspection, but if they don’t do this, you better keep looking to find the right home. You just don’t want to buy a house then undergo extra costs of fixing broken fixtures.
Beat down the price after inspection
Every home has some flaws. You can use what you found during your review to get the further price reduction on the property. This way you can save money to do remodeling and add décor that suits your tastes.
Specific amenities in your community may cause the value of your home to appreciate with time. It is a good investment to buy a house near a school for instance. On the other hand, if your new home is in a district surrounded by expensive mansions, you will cough out more money in property taxes.
How much can you afford to pay every month for your new home? This largely depends on the amount of your income, your assets, savings, and debts. The rule of thumb is this; don’t spend more than 36 percent of your monthly income on a mortgage. Banks might decline you for a mortgage if you have bad credit reports. Credit repair measures like paying your bills on time, maintaining low balances and paying over the bottom line should get you out of the red zone before buying your first home.
Sometimes people use consolidation loans to get another loan. You borrow against your home so that you can use the money to settle other smaller debts so that you just have one loan to service- the house. This is a risky undertaking that might tie your home in an unending debt cycle.
To make the right decision about home buying and get the best deal, first time home buyers need to seek guidance from realtors and mortgage advisors continually.