Buying Your First Home? What You Need to Know
Everybody is looking to be independent these days. Buying a home is one of the things that portray you as an independent-minded individual that can make crucial decisions in life. However, buying your first house is not something that can be done in the blink of an eye. It is a lifetime decision that can either make or break you depending on the measures you take. It will be in your best interest to consider the following factors before you buy your first home:
Know the market
Whether you want to buy a house in Arizona, New York, or Boston, monitoring the conditions of the market in the area will help you know what needs to be done before you put an offer on a home. In the realtor world, this is called mapping. Go to your area of interest and pay special attention to the duration that most homes in your price range stay on the market. Find out whether there are any significant shifts in the asking price.
You may be surprised at how much information you can get compared to when you read from a secondary source. But if you are unable to gather sufficient data, a local realtor can break down all the data points to help you decide.
Having good credit
Before you buy a house, ask yourself; Are you credit-worthy? In case you didn’t know, getting a mortgage these days is more difficult than it used to be. Lenders will go the extra mile to gauge your credit score, depending on your ability to offset loans and other types of credits. Your credit score should range from 680-720 to help get the most competitive interest rates between 3-5%. Anything less than that means your credit-worthiness is not appealing, and you should take time to improve it.
Your income, debts, assets, and liabilities also play a significant role in determining whether you have the maximum debt-to-income ratio. If you are unable to gauge your credit or mortgage worth, use an affordability calculator. This not only helps you to determine the type of monthly mortgage payment you can afford, but it also guides you on the changes you need to make in case you do not have a clean record. This includes taking care of any outstanding debts you may have accrued in the past.
Hiring a good realtor
Research suggests that most first-time buyers are young professionals or young families looking for convenient access to social amenities. Consequently, a pedestrian-friendly neighborhood seems like an excellent idea for a first-timer. While many sellers are looking for potential buyers to buy their homes, you can never be sure about who you are dealing with. Having a knowledgeable and trustworthy local realtor is the only surefire way of ensuring you get the best deal regardless of whether you are on a budget or not.
Most of the time, you will be working closely with your agent, and it is crucial to find someone who can customize their services to meet your needs. Having a wide range of information at their fingertips is not the only thing that measures the efficiency of a realtor. Instead, the agent should be an expert negotiator who knows all the steps and the ins and outs to ensure you get value for money. Finding the right one may take you a great deal of money and time, but it will be worth all your efforts.
Have an inspection done
Once you and the seller have agreed on a specific offer, you will need to have a home inspection done by a professional. Chances are you may fail to notice some minor issues that can affect the quality of your future home. So, getting an inspector will save you from not seeing any slight errors.
Inspection is a wide range of activities, including roof type assessments and any crawl spaces, but you need to be sure you know what is included in your agreement. Sometimes, the inspector may fail to test for things such as radon, mold, and pests. Even if they do, they might not reveal everything as it is. One way of ensuring the job is done right the first time is by asking them to pay attention to detail. You are the one who will stay in that house, so reviewing the report before signing an agreement will help you decide what the seller needs to fix.
A realistic budget
Window-shopping is allowed when looking for a house to buy. Through your realtor, you can come up with a list of homes that cost less or higher than the amount you intend to spend. Find out the reason what these houses have that your potential house does not. Even if you change your mind, consider what you can afford to spend on your purchase. A home that may appear cheaper today may attract a higher price in the future after the necessary changes have been made.
In the competitive real estate market, it is likely for you to receive bids from several developers. Sticking to your budget not only prevents you from paying a mortgage payment you cannot afford, but it also gives you peace of mind knowing you have made the right decision.
The type of house You are buying
It would be pointless to buy a home that feels too small to accommodate all your household members. Buying a house that is too big to house only two people also sounds absurd, unless you are a high-end spender who is not keen on budgets. Whatever your reason for buying a particular one, make sure it at least fits your five-your vision for yourself. Do not go for something you will outgrow within a couple of years. The last thing you want is to shop for another house soon after you have bought your first one.
As you tour homes during open houses, pay attention to their overall outlook. Take note of foul smells, stains, or damaged structures, as these conditions are indicators of poor condition. Whenever you notice any red flags, ask a lot of questions about the home. If other potential buyers are viewing the house as you, plan for a second or a third visit to get the answers to your questions. Chances are, the realtor may be having divided attention and may not answer all your questions correctly. Remember, it is safer to buy a home that you can grow into, rather than one where your growth will soon outgrow its capacity.
So, you have saved some money to buy your first house. Congratulations! However, you risk losing all your savings when you fail to follow these simple tips. Buying a house for the first time is a matter that needs to be handled with precision since any mistake you make will attract heftier costs in the future. If you are stuck at how to calculate your credit score, choosing the ideal house, or getting an experienced inspector, an excellent realtor will help you. Before you hire your agent, do your research about the area you plan to buy your house. That way, you will have a list of realtors to choose from.