Buying your first home is a big investment. The entire process can be more complex and stressful than you expect. You want to make a decision that makes financial sense for you over the long term. Here are some factors to consider before signing on the dotted line.
- Buy a home you know you can afford
It is not worth looking at properties that are more expensive than you can afford. This not only wastes time but can cause frustration and hamper the search for a suitable property.
Decide what you can afford and then look at houses that fall strictly within your budget. You do not want to end up with a mortgage you cannot really afford even if the mortgage lender thinks you can because of what your finances look like on paper.
For many buyers – especially first-time homebuyers – the best mortgage option is a Federal Housing Administration Loan (FHA). Click here to find out all about FHA mortgage loans on the Maximum Exposure Real Estate website.
- Do not fixate on the purchase price alone
The purchase price is just one aspect of owning a home. Depending on the area, real estate taxes, homeowner association fees and insurance fees can quickly add up.
Home improvements and home maintenance can be very costly. A few cosmetic changes will not cost much but if you plan to change the kitchen or bathrooms, it can cost you much more than you imagine.
When choosing a home, it is important to consider all the costs involved so you are comparing apples with apples. For instance, a cheap home with high taxes may cost you more than an expensive one with low taxes.
- Use a trusted realtor
Some first-time buyers may be hesitant to use a realtor because they get a commission. However, the seller and not the buyer will pay the commission. You need to keep in mind that the agent representing the seller will not protect your interests as the buyer.
A savvy realtor can guide you through the whole buying process, from negotiating the price to conducting home inspections. A realtor will recommend that you fully understand mortgage lender costs and fees and will be available to answer your questions.
Contracts are meant to be negotiated and a realtor can give advice before you sign. For example, you may want to make a purchase subject to the approval of a mortgage.
- Choose the right area
When choosing the area in which you want to buy, you need to consider factors such as your commute to and from work, schools in the area for your children, crime statistics and other factors.
Sometimes broadening your geographic search can open up new possibilities. You need to weigh up what is most important to you. A fixer-upper property in the suburbs may be a better option for you than one in town that costs far more.
- Determine your needs
Determine your needs before you start house hunting. You may have to make some compromises if you realize certain criteria you have are incompatible. As you search, you may have to prioritize what is non-negotiable. You may decide, for instance, that a large backyard for your kids to play in is more important to you than a detached garage.
Do not allow impressive features, like gold taps in the bathroom, cloud your judgment when the rest of the property does not meet your needs. On the other hand, do not focus on superficial defects, like paint colors or old wallpapers that can easily be fixed to make the home suit your preferences.