Are you thinking about buying your first home but aren’t sure where to start? Don’t worry, you’re not alone. Every homeowner goes through the same feelings you’re likely going through now at some point in the process. Buying your first home can be a mentally and emotionally exhausting task, so I’m here to share some tips for first time home buyers.
Get your debt under control
A big factor of buying a home is making sure your debt is under control. Debt is a very common denominator among home buyers, especially first-timers who may only be a few years out of school. While you may not be able to get rid of all of your debt before thinking about purchasing a home, it’s a good idea to at least get it under control and make sure that you can manage to continue paying that debt, as well as any expenses that come with purchasing a home.
Save for a down payment
By saving up enough for a down payment, you can ensure that you’ll be able to secure a good mortgage rate while hopefully avoiding things such as private mortgage insurance (PMI). If you can afford to make a down payment of at least 20% or more, that would be best. Anything lower than 20% will usually involve you having to pay PMI, which tends to cost around 1% of the entire loan and is added to your monthly payment. There are plenty of mortgage do’s and don’ts when it comes to buying a house, so finding the right one for you is crucial to the process. With a well thought out down payment, you can easily get a manageable mortgage that you’ll be able to pay off sooner rather than later.
Research potential neighborhoods
One of the worst thing that can happen is you find what you believe to be your dream home, but when you move in you learn that you have extremely disruptive neighbors, or the internet in your area is poor. Since these types of preferences vary from buyer to buyer, neighborhood to neighborhood, it’s important to do a little research before you make your purchase in case you end up not being happy with your decision later down the line. You may also want to think about things such as what your work commute may look like, or if the area is child-friendly. Some quick real estate statistics show that 78% of buyers care more about the quality of the neighborhood they’d be living in over the size of their home, while 57% would rather have a shorter commute than worry about having a big yard.
First time home buyers often have a lot to think about before making their final decision. While there is certainly more to buying your first home than what I’ve mentioned here, these are three tips I believe to be of the utmost importance.