The idea of a new home is so financially challenging that you keep switching from the idea of owning it to renting one. Experienced home-buyers and property investors also make mistakes but let’s demystify the process and make your first home buying experience a pleasant one. Below are some things to consider when buying your first home.
Things to Consider When Buying Your First Home
First, you need to decide why you need to buy your own home. For some people, they want to live independently and renovate every inch of the home according to their own tastes. Others simply want to save on the monthly rent and convert their monthly living expenses into a solid investment. Whatever your reason and desire to own may be, here are five things to consider before making a final decision:
- What is the type of home you need? For smaller families, a condo or two-unit house is feasible. For a larger party, houses with multi-units are good to go.
- Home Specifications: The new home must fulfill your most important needs. Is the space livable per your needs? Consider important points for example; if there is an asthma patient or anyone with breathing problems, then the home you buy must be properly ventilated. Do you have pets? If so, maybe a size-able yard is a must-have.
- Mortgage Qualification: The ideology of buyers and lenders differs significantly here. You may be confident that you will qualify for a higher mortgage whereas the lender may put you into a lower category. Discuss with your lender how much mortgage you qualify for and then engage a realtor with a realistic budget in mind.
- Home Space Vs Mortgage: Sometimes banks provide you generous mortgages. In such a case, check the value of the property and calculate your monthly repayments to the bank. If you can afford a bigger property within the given mortgage, then you should really buy a larger home as this will be a lifetime investment.
- The Guide: Seek help when buying your first home. Speak with seasoned professionals and consultants to evaluate your eligibility, estimate the property value, and negotiate with the various dealers that will be involved in the transaction.
(READ: How to Find the Right Neighborhood for You)
Market Tips When Buying a New Home – The Final Verdict
When out in the market, you have to deal with a lot of paperwork and manage countless tasks here and there… In the process, don’t forget these expert tips when sealing the deal.
- Gather information about the property from as many sources as you can. Seek advice from friends, family and colleagues. If you have decided on a property, talk to the neighbors and nearby shopkeepers. Look at the quality of the school district and make sure a homeless shelter isn’t going up on that vacant lot next to your soon to be home.
- Federal projects are different for first-time home buyers. You will receive better deals and more convenient options. Select a reputable legal advisor to help you get the best federal deals.
- Discuss with your advisor or consultant about making an offer for the property. They are experienced in evaluating the worth of the property while considering surrounding commercial properties, area schools, clinics and hospitals, property structure and manufacture items, and future price of the property for resale.
- Inspect the home with the help of professionals. Check the construction quality and make sure the property is safe to live in. Check for repairs, piping, and drainage. You will get your deposit back if the seller has not notified you about the poor quality. A good thing to keep an eye open for is water damage in the ceilings or any swelling in hardwood floors or woodwork.
- If you feel the property caters to your needs and standards, and you are eligible for a good mortgage as well, then don’t be late. Seal the deal or move on to scheduling movers!
Getting an FHA Loan
With a credit score of 620, no bankruptcy or year-old paid bankruptcy, good billing, payment, and tax history, and a year-old paid student loan will let you qualify for the FHA loan easily. For prime FHA loan rates, you need to have 720+ credit score.
For misconceptions and confusions, read FHA Mortgage Qualification Myths Debunked.
Getting a VA Loan
For those with a history of military service, VA home loans are a good option for first-time buyers as they don’t have to pay huge down payments and Private Mortgage Insurance. The funding fee and credit qualification scale is also quite low for first-time home buyers. To learn more about the VA loan process, click here.