Buying your first home can be scary, but here are five things you need to know to have a successful and smooth home-buying experience.
Are You Ready to Own a Home?
Before you purchase your home, you must first decide if you’re ready to buy a home in the first place. Buying a home is one of the most “adult” activities you’ll ever face.
Do you still live with your parents? Or have you lived on your own before, whether it’s through college or your first apartment? If you’ve had your own place before, you already understand the hefty responsibility that comes with living alone. If you haven’t lived on your own yet, it may be worth considering renting a place before you buy.
Have You Saved Enough?
Owning a home comes with a whole mess of costs that you may not be used to as a new home buyer. You’ll want to decide on which state and city you’d like to live in. Many states vary in their property taxes and fees. Typically, you’ll want to save enough for a down payment, closing costs, and your monthly mortgage.
An important note to keep in mind is that your home may require upgrades, repairs, or regular maintenance. As a rule, try to save approximately 25 percent of the home’s sale price. Any costs past the initial buying process may vary.
Can You Picture Yourself Living There?
There are several things you’ll want to consider before looking at a new home. To save time, money, and effort during the home-buying process, start by spending some time online to learn more about the house or take a virtual tour. If you find a home that you might want to explore, research the neighborhood, nearby schools, and emergency centers, and consider if it’s an area you want to live in.
When you’re ready to buy your home, make sure you’ve prepared all the correct documentation, your credit score is at least 700, and your down payment is ready. Having everything you may need ahead of time makes you look better to the lender and makes the process go much smoother.
Is Your New Home Protected?
Whether you want homeowner’s insurance or not, some lenders may require that you have insurance. The purpose of homeowner’s insurance is to protect your home and all its assets, including personal property, against weather-related damage and accidents.
If you don’t have homeowner’s insurance, you may be risking paying out-of-pocket for damage repairs, which can rack up a hefty price tag. Be proactive and get homeowner’s insurance ahead of time.
Have You Considered All Financial Routes?
There are many ways to finance a home, including applying for a loan. However, make sure to do your research before jumping into a loan contract, as there are many differences between private and hard money loans.
Read the fine print, and work with a mortgage broker to help you determine which loan option is best for you and your future.
Remember to go at your own pace and explore all your options before making the big move! Now that you know the five things you need for buying your first home, you’re ready to start this new chapter of your life.