When you’re buying your first home, there’s so many things to consider: you need to secure a home loan, find a realtor, decide on an area… the process can be a bit overwhelming.
And as someone new to the home purchasing process, it can be challenging to know exactly what to look for in a home. What kind of criteria should you be judging potential homes against?
Here are 4 things you should look for when you’re buying your first home:
1. A House You Can Grow Into
Purchasing is not like renting. When you rent, if your home no longer meets your needs, when your lease is up you can just pick up and move. But with homeownership, ideally you want to stay in your home long enough for the property to appreciate in value, which is at least 3 to 5 years. So it’s important that you not only consider how well a home fits your current needs, but also how well it will fit your future needs. You want a house you can grow into.
Think about where you plan to be a year from now, two years from now, five years from now. Are you planning on expanding your family? If so, you’ll want to look for a house with enough space to accommodate your growing brood. Thinking about getting a big dog that needs lots of exercise? You’ll want to have a backyard so they have plenty of room to run and play. Are your parents close to retirement, and would you like to have them come and live with you? Then a home with an in-law suite would be a great fit.
When purchasing a home, don’t just look at how well it might work today. Think of how well it will work for all your tomorrows.
2. A Solid School System
When you’re buying a home, one of the first things you should look at is the school system. Is it highly rated? Is it a place that people want to send their kids? Is your new neighborhood invested in education?
Even if you’re not a parent yourself, the school system in your neighborhood should play a huge role in deciding whether a property is right for you. A good school system can increase the value of your home and will appeal to a wider audience (i.e. – parents with children) if and when you decide to sell. On the other hand, a poor school system can slow the appreciation or even devalue your home.
Bottom line: whether you have children or not, investigate your new neighborhood’s school system before you make a purchase.
3. The Right Neighborhood Fit
Buying a home is a commitment, and when you buy, you’re not only committing to your home. You’re also committing to your neighborhood. And as such, you want to make sure that the neighborhood you buy in is the right match for you and your lifestyle.
For example, if you don’t own a car (and have no desire to own a car), you’re going to want to purchase a home in a neighborhood where you can easily access restaurants, shops, and other needs on foot or bike. If you’re obsessed with the outdoors, you probably want to look in a more nature-centric neighborhood instead of the city center. If you have a family, you’ll want to look for a neighborhood with other families so your children have ample opportunities for recreation and to make new friends.
4. Your First Home At The Right Price
When you’re buying your first home, the last thing you want to do is saddle yourself with a mortgage payment you can’t afford. That’s why it’s important to be realistic about your budget and then find a home that has a price tag you can comfortably afford.
Many first time homeowners get so excited about a property that they’ll stretch their budget in order to get into their “dream home.” But when you buy a house that’s outside of your budget (and outside of the price range you can afford), you’re setting yourself up for major financial stress, which isn’t a great way to start off your new life as a homeowner.
Before you start looking at homes, sit down and create a budget and be realistic about what you can afford to pay every month. Then, even if you get approved for a higher amount, stick to that budget. There’s all sorts of unexpected expenses that come along with homeownership, like broken appliances and surprise repairs, and if you’re funneling all your extra cash into a too-high mortgage payment, you won’t have the resources to deal with those situations as they arise.
Buying your first home is one of the most exciting times in a person’s life. Enjoy the process, take these 4 areas into consideration, and you’ll find the house that’s right for you – and your life – in no time.
Buying your first home can be one of the most exciting experiences of your life. But it can also be one of the scariest.
Buying real estate is a complicated process. And if you’ve never purchased a home before, the fear of all those unknown variables can make the experience stressful, frustrating, and downright terrifying.
If you’re thinking about purchasing a home but are dealing with the fear that comes along with it, don’t worry! You’re not alone. Most first time home-buyers deal with a certain level of fear as they get ready to buy their first home.
But that fear doesn’t have to hold you back. Here are three of the most common fears of first time home-buyers (and how you can overcome them).
“I can’t afford to buy a first home.”
The number one fear most first time home-buyers struggle with is the fear they can’t afford to buy a home.
But while there are certainly people who aren’t in the financial position to purchase a home, becoming a homeowner isn’t as expensive as you might think — and sometimes all it takes to be able to buy a home is a little budgeting.
If you’re worried about being able to afford a home, it’s time to take a good, hard look at your finances. Make a list of all of your monthly expenses and all of your debt. How much are you spending per month on living expenses? How does that compare to how much you’d be spending per month on living expenses if you were to purchase a home? How much are you saving each month? Are there any opportunities to cut back on spending and pad your savings a little more each month? How much debt do you carry and what’s your plan to pay it down?
Getting a firm understanding of your financial situation will a) give you a better idea of how much you can afford to comfortably spend on a house, and b) help you come up with a plan to get there.
“My credit isn’t perfect. How am I ever going to get a loan as my first home?”
If you have less-than-perfect credit, a major fear you might be dealing with is how you’re going to get a mortgage.
Many first time home-buyers fear that their credit report might hold them back from securing a loan. But while getting a mortgage with not-so-hot credit can be a challenge, it’s certainly not impossible.
First things first: if you’re thinking about purchasing a home, you need to get a copy of your credit report. According to an FTC report, 1 in 5 Americans have a mistake on their credit report — and those mistakes can end up costing you in the long run. The lower your credit score, the higher your interest rates will be, so it’s important to make sure there’s nothing inaccurate on your report that’s dragging down your score.
Once you’ve reviewed your credit report, you’ll want to do everything you can to bring up your score before you apply for a loan, like pay down any high credit card balances, which will bring down your credit utilization and bump your score. You’ll also want to make sure to pay all of your bills (including your rent and utility bills) on time, which will help show lenders that you’re responsible with your debts.
If you do all of these things and still get stuck with a high-interest mortgage, it’s not the end of the world! You can always continue to work on increasing your credit score and refinance in the future.
“I have no idea what I’m doing. How am I supposed to successfully buy my first home?”
As mentioned, buying a home is a complicated process. From getting to know the market to finding the right kinds of properties to negotiating with sellers, there’s a lot to handle. And if you’ve never purchased a home, it can feel overwhelming. The sense of “I have no idea what I’m doing!” can be pretty terrifying.
But luckily, you don’t have to know what you’re doing when it comes to buying a home… as long as you work with someone who does. Working with a real estate agent who understands your market is an invaluable resource, especially to first time home-buyers. Your real estate agent can not only walk you through the entire process, but they also handle the hard stuff — like finding that perfect property and negotiating with tough sellers — so you don’t have to.
You might be afraid that the fact you’ve never purchased a house before will hinder the process, but when you work with the right real estate agent, there’s nothing to be afraid of.
Purchasing your first home can be a scary process. But now that you know the most common fears — and how to overcome them — it’s time to transform that fear into excitement, lets get out there, and find the home of your dreams!