A first-time homebuyer knows there's more to it than finding a cute house with an affordable monthly payment. There are many important steps to the process, and the more that homebuyers know about them, the better chance they have at making good decisions. Here are five things no one tells you about owning your first home.
Get Pre-Approved Before You Start Looking
Dipping your toes into house hunting seems fun, but there's important business to handle first. Get pre-approved for a mortgage loan. Talk with a mortgage originator and share you financial picture. Let them pull your credit report. While you're there, ask them about first-time homebuyer assistance. Hopefully, you will qualify for pre-approval for a mortgage because it offers several benefits. Real estate agents take you more seriously, pre-approval increases your bargaining power with sellers, and sets you above the competition if winning the property comes down to a bidding war. Securing pre-approval is one of the biggest boosts a first-time homebuyer can give their purchasing process.
Figure Out How Much Home You Can Afford
A common pitfall for first-time homebuyers is choosing a house that's too big for their budget. Don't automatically think you can handle a payment the same size as your current monthly rent. Stressing out to meet a mortgage payment every month can wreak havoc on a person's peace of mind. Take an honest look at your debt obligations before looking at homes. Write it all down and determine the amount you can spend on a mortgage payment. Do not, no matter how lovely the home, commit to more than this amount. Stumped on how much you can afford? There are helpful mortgage budget calculators that can help.
Practice Smart Money Management to Prepare for Home Ownership
Get into the best financial shape possible before embarking on buying a house. If you don't have an emergency fund saved, start one now. Even a few dollars a week socked away into a savings account can add up. It's time to start saving for a down payment, too. A hefty down payment is integral to getting the home you want. Create a line item in your budget and save that amount out of every paycheck. Build up your down payment faster by cutting your spending, downsizing your vacations, or picking up an extra part-time job.
Leaving the Landlord Can Cause Unexpected Expenses
It's not correct to assume if your mortgage payment is the same amount as your rent, you'll be golden. Houses incur more costs than apartments. Your utilities will most likely increase. You will also need to pay property taxes and insurance every year. Repairs are another expensive homeowner headache that get the unprepared in trouble. A broken water line, out-of-order water heater, or defunct heating and air unit can cost thousands of dollars! First-time homebuyers should think about these happenings and plan for them, especially if you're buying an older home. It's not a matter of IF they will happen, it's WHEN.
Consider Your Neighborhood as Closely as the House
A perfect house in a high-crime or inconvenient neighborhood is probably a bad decision. Before you begin looking for your first home, think about the location. Is it close to your job? How are the schools? Is there crime? Does it offer parks and activities? All these answers need to play into the areas you search for a home. Decide on the areas you want to conduct your search and focus on houses for sale in your price range in your chosen neighborhoods. Adding a neighborhood to your "want" list, along with your square footage and number of bedrooms is a methodical way to help you save time on the front end by not looking at homes in areas where you don't really want to live. It's also an exercise that helps first time homebuyers drill down to the factors of a house that's important to them. Purchasing a home for the first time can be challenging and scary because there are so many choices along the way. It's vital to keep a clear head and take your time. By considering your budget and doing some research into what you can afford and the neighborhood you want to live, you set your course for a successful search. Professionals such as real estate agents and experienced mortgage originators can offer first-time homebuyer programs and guidance along the way to help you reach a decision and ultimately purchase the home that suits you and your family best. Our agents at The Real Estate Firm are devoted to making your home-buying experience a stress-free one. We believe the process should be exciting and rewarding, and our skilled agents will guide you through each step from navigating the market to signing the papers. Contact us by calling 865-770-4030 or fill out our online form to schedule a free, no-obligation consultation.