By purchasing a home, you can ensure that money is at least being spent on a tangible goal, i.e. paying off your mortgage and getting a clear title to your own house. Of course, buying your first home can be incredibly stressful and nerve-wracking, which is why it’s important that you go into it fully prepared.
Although nothing can guarantee that your home buying experience will be a pleasant one, making sure that you properly consider the following five factors is one of the easiest ways to give yourself the best chances for success.
How Much Do You Have for a Down Payment?
One of the first things you’ll need to consider before beginning the home buying process is how much money you can afford to put in as a down payment. The more money that you can put in up front generally equates to better terms on your mortgage and will also end up saving you thousands in interest payments.
Most experts recommend waiting to buy until you can afford a down payment equal to at least 20 percent of the home. Although this rule isn’t set in stone, you’re almost always better waiting six months or a year until you can actually afford this type of down payment. Although it will mean having to rent for a bit longer, the huge amount that it will save you in the long run makes it well worth the wait.
Are You Properly Budgeting for Expenses?
The biggest mistake many first-time home buyers make is in purchasing a house that they can’t actually afford. Just because you can get approved for a mortgage for your dream home doesn’t necessarily mean that you can afford it, and should you start falling behind on your payments, you could suddenly see all of your dreams come crashing down around you.
In this sense, the best possible thing you can do is to sit down and make a monthly budget of your income and possible expenses—making sure that you set aside a certain amount each month for future goals, emergency funds, etc. Unfortunately, many first-time home buyers forget to properly budget for things like utilities, insurance, commuting costs and other unforeseen expenses. By making sure to properly account for all of these things, you’ll go a long way towards ensuring that you can actually afford your monthly mortgage payments and other related expenses.
What Are Your Future Plans?
It usually makes no sense to buy a home unless you plan on staying there for at least five years. However, it also make no sense to buy a small, two-bedroom home if you and your spouse are considering having kids in the future since you’ll quickly need to upgrade to something bigger as your family grows. Therefore, it is always important to sit down and try to determine your long-term plans and goals as this will make it easier to ensure you choose the right house.
This planning might also include any renovations or additions you would want to make on a home. Since you’re thinking for the future, you can consult renovation TV shows, courses like Success Path, or even Youtube videos to learn more about realty and renovation. The further ahead you can plan, the better prepared you can be.
How Much Will It Cost to Renovate/ Update?
Most experts say that it is much more important to pay attention to the overall layout and features of a home than it is the décor and furnishings. In a sense this is definitely true as you can always renovate and make changes over time to make the house more in line with your personal style and tastes. However, you will still want to have a good idea of exactly what renovations you will need to make and how much they will cost.
Choosing a fixer-upper makes sound financial sense in some situations, but not always. On the other hand, just because a home was recently renovated or upgraded doesn’t necessarily mean that the work was done well or that quality materials were used. Therefore, you will want to pay close attention to the overall condition of the home so that you can figure the cost of any necessary renovations or upgrades into the overall purchase price.
What Factors Are Most Important to You?
This last one is fairly simple—know exactly what you want and stick to it. In this sense, you might consider making a list or ranking of the features you’re looking for and which ones are most important. This list could include a huge number of things—number of bedrooms, size of the backyard, safety of the neighborhood, quality of nearby schools, neighborhood demographics, etc. By creating a checklist of the factors that are most important to you, you can make it much easier to compare the various houses you’re looking at to determine which one is the best fit.
Buying your first home will always be stressful no matter what you do. Nonetheless, by taking a bit of time to consider the above factors and ensuring you’re fully prepared before you begin your search, you should be able to simplify the home-buying process and hopefully end up with exactly what you were looking for.
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