10 Tips for Buying Your First Home
As an aspiring homeowner, you may have already started thinking about buying your first home. The process of finding and funding the acquisition of a good home for yourself can be nerve-wracking as well as giving you an exciting experience and opportunity. To fulfill your ambitions of becoming a homeowner, you need to start preparing yourself in advance by taking various highly essential measures that would ensure you land the best deal in the market.
You also need to be cautious of certain critical mistakes that first time home buyers often make. To set you off on your ambitious journey of becoming a first-time homeowner, here are 10 important tips and steps that we at GM Home put together to help you buy a suitable home for yourself.
Set Your Budget Right
The first step you need to take as an aspiring homeowner is to set a realistic budget. The real estate industry out there is packed with real estate deals of houses and apartments on sale at varying prices. The amount of money you have will determine the kind of home you will eventually acquire. Thanks to various financial institutions available in the market today, when contemplating your budget for buying your first home, you don’t have to think in terms of how much money you have saved in your bank. You may, therefore, explore the various financing options available in the market.
Exploring your budget and financial capability will ensure that you take off on your journey to becoming a homeowner in the right way. The cost associated with home ownership may be eased by using various options including personal savings, bank financing, mortgage financing, among other options. In addition to the mortgage payments, it is also important to think about other additional monthly costs such as utility costs and homeowners insurance, as well as periodic maintenance costs that you will be required to deal with once you acquire the house.
Know What You Want
The second important step to take when seeking to buy a house is to know your preferences and tastes in regard to the kind of home you want to buy. When looking for your preferences from the vast expanse of the real estate industry, particular factors that you should check include whether you need a standalone home or an apartment type (condominium) home; each of which comes with pros and cons as well as cost variations. You also need to be clear on of the size of the house you need in terms of the amount of square feet.
Other important areas you should focus on include the number of rooms, the number of bedrooms, whether the house comes furnished or not, the size and type of kitchen, the presence of additional features such as garages and basements, and whether the house is fenced. Such features define the differences between homes in the real estate market. They also define the house’s market prices.
Start Saving Early
Once you have established your preferences in terms of the house you want to buy, it is always advisable to start saving as early as possible. Setting aside some savings towards the acquisition of the property of your dreams gives you an opportunity to get liquid funds that may prove helpful at some point in the process of acquiring the house. Depending on the frequency of your saving habits, you may need to save for a number of years to get the capital that would enable you to acquire a good property. You may need to exploit various saving options with different financial institutions which, upon evaluating your savings profile, may offer you a mortgage at the end of a certain duration of time.
In today’s economy, when aspiring to buy a particular home of your interest, your savings probably won’t be sufficient. You may, therefore, need to explore bank financing and acquisition of mortgages to help finance your home buying endeavors. When seeking the mortgage financing option, the amount of mortgage and interest rate that you can acquire from the market is determined by your credit score. Conventionally, the better and higher your credit score, the better your position is in terms of securing a good deal from financial institutions and banks.
Knowing your credit score will give you an idea of how your financial profile is, while giving you an opportunity to improve on areas of concern that may help you score even better. Some of the factors that may affect your credit score which you may improve on include the number credit cards you have and their balances, your past payment history, and if you had any repossessions, bankruptcies, or charge-offs. The age of your credit history also matters as an individual who has had a long positive credit history and who started saving long ago is normally regarded as being in a better position of qualifying for better mortgage terms.
Decide Where to Live
When seeking to buy your first home, it is highly important to take enough time to decide on the best area to live in for you. Your neighborhood is bound to determine various aspects of importance in your life. Issues such as the kind of amenities available within the locality of your home are highly important and should be well thought out. Amenities and services such as schools, the presence of sports fields, shopping centers, fire stations, as well as the presence of law enforcement are highly important in ensuring that you live a comfortable life.
Also, some neighborhoods express certain levels of control over what residents can engage in, such as whether you can have pets or whether or not you can have personal gardens. Some controlled areas may even exercise control over whether you can erect additional structures on your land such as decks, sheds and garages. It is therefore important to give your neighborhood careful thought to ensure you obtain a house located in a place where you would be comfortable living.
Work with An Agent
The process of locating and buying a house may be quite tedious and complicated. To make your work easier, it is highly advisable to seek and work with a seasoned real estate agent who has high levels of experience and expertise on where and how to land a good deal. Real estate agents and agencies have put in lots of resources towards analyzing particular real estate markets and are thus able to consolidate their data to help you locate the home of your dreams. Real estate agencies sometimes also consolidate and bring together persons seeking to sell their homes and those who seek to buy. Working with industry experts will, therefore, give you peace of mind and consequently can enable you to land a fair deal quickly.
Find A Mortgage
You may, in the process of seeking to finance your home acquisition, fall short of the financial requirements. If your credit score is good enough to allow you to get a mortgage from financial institutions, then you may seek to pursue that option as it will ensure you fulfill your home ownership and vision without obstacles. When seeking to acquire a mortgage, you should pay attention to critical details such as the mortgage terms regarding the duration of payment, the interest rate payable, the monthly payments, and the overall mortgage costs to be incurred. You may need to weigh several mortgage and loan products available in the market served by different financial institutions in order to get the one that best suits your particular needs.
Caution should be exercised when checking the mortgage terms to ensure the overall costs are well within your budget. You don’t want to lose your house because you got in over your head and were unable to keep up with the monthly payments. Before closing the deal, you should endeavor to do a thorough, comprehensive evaluation of your monthly income and expenses to ensure you are able to comfortably make the monthly payments for your acquired mortgage plan. Exercising such caution ensures getting a good deal that will favor you in both the short and long term.
Buy at The Right Time
As a first-time home buyer, you should pay attention to the time of the year and the season in which you begin the search for your new home. The real estate industry is broadly affected by various factors that shape the housing sector’s prices, demand, and supply. Closing a good deal for the house of your dream can be affected by the time of year. Real estate experts and analysts have determined that summer experiences a boom in housing demands and supplies. However, due to the versatility and generally high demand for housing, the dynamics for demand do not imply that more supply leads to reduced prices. Summer tends to experience more housing supply and demand than the other seasons, yet it usually has higher prices than the rest of the year.
Even though housing prices are higher in the summer, with many units listed for sale it is still the best time to search the market. More houses for sale means more opportunity to find the right one for you, even though home sellers and real estate agents are less willing to negotiate on the listing prices in the summer. As the summer comes to a close, the remaining unsold houses will have been on the market for several months and the sellers may not only be more receptive to lower offers, some may have actually reduced their prices, enabling you to land a house at a better price than you expected.
Besides, locating your dream home in late summer or early fall gives you an opportunity to visualize how good the ground is, as all the foliage would normally be blooming as opposed to winter when trees are bare or covered by snow. In general, it is good to understand the dynamics of the real estate market when buying a house as that puts you in a better position to take advantage of the various factors that affect the fluctuation of housing prices.
Inspect Your Prospecting Home Well
Home inspection is highly essential whenever seeking to acquire the perfect house of your dreams. Whenever undertaking such an inspection, it is highly advisable to work with seasoned experts and real estate agents who are knowledgeable on the various means of locating well-constructed homes that are worth the price. After locating the house you want to buy, but before finalizing the sale, it is important to have a home inspection performed by a home inspection professional, one who will evaluate both the interior and exterior condition of the house. The inspector’s report will indicate the overall condition and functionality of things like the roof, plumbing, electric service, heating and air conditioning systems, and remaining appliances.
Assuming you gave a deposit and signed a formal offer prior to the inspection, (which is the normal sequence of events) the offer should have specified your ability to cancel the purchase if the inspection uncovers serious problems with the house. If there are problems, you may still buy the house if you are able to negotiate an agreement with the seller to make the necessary repairs or drop the price of the house by an amount equal to the amount it would cost you to get the repairs taken care of after the sale.
Type of Leasehold Title on The Property
When buying a property, it is also important to focus on establishing the kind of title the property is attached to. Generally, there are two types of property titles that you should pay attention to; Sectional and Full.
A Sectional Title is a title where the property stands on a piece of land that is extensively managed and controlled by a real estate property group, such as a homeowners association. Generally, such a property is normally regarded as less expensive as any maintenance issues are handled by the association; however, one has to pay a monthly fee, typically referred to as an HOA Fee. In addition, this type of property title may not give you the flexibility and permission to make additional changes within the property.
The Full Title type of property, on the other hand, gives you the necessary level of freedom to make renovations without requiring permissions from any authority. Full title properties are generally regarded as more expensive as compared to sectional title properties.
In conclusion, finding and buying your first home is a long journey that begins with a first step; which in this case involves initiating your dreams by setting targets. Starting your home buying plans early enough gives you an opportunity to build upon your financial foundation while also helping you take time to find the house of your dreams. Exercising due caution in every step along the way helps ensure that you land a fair deal that will satisfy your home needs and specifications.