Things to Keep in Mind Before Buying your First Home
You have gotten your dream job and your soulmate right beside you – you feel fulfilling! Suddenly, you started thinking about how to move out of your crowdy apartment to buy your first home. Getting your first home is a huge step and can be overwhelming. It means an increase in your monthly expenses for maintenance, mortgage, utilities, and many more. Here are things to keep in mind before taking this huge step.
The Market
One of the things you need to keep in mind is the market. Since the introduction of the Great Recession in 2008, the real estate market has gone back and forth between a seller’s and buyer’s market in many areas. The buyer’s market is a situation whereby there are more houses for sale than there are buyers for them. If you need a loan for your first house, consider mortgagegoat.com.
- A seller’s market is when there are more buyers than the available houses for sale.
- Discuss with an estate agent that understands the current situation of the market.
The Process
You need to know that buying a house is not like shopping for clothes – or even a car. Buying a house can be a complex process involving a lot of paperwork. First, you need to save money for a down payment, closing costs, repairs or upgrades, monthly mortgage payment, home inspection, and many more. Other steps that you will be required to take beforehand include:
- Getting prequalified for a mortgage or learning how much house you can afford.
- Apply for a loan
- Go for house inspection
- Gather your funds for closing.
Jobs and Children
There are lots of things associated with your jobs that are vital when you’re considering buying your first home. First, you need to know how stable the job is. Have you had the job for a minimum of a year? Do you see yourself holding onto the job for several years? These are the questions a lender will ask you before considering if you’re qualified for a loan or not.
In addition, you should consider if you’re planning to have children. If yes, you will want to consider the neighborhood and school area before buying your house. Based on a study, 20% of house buyers would not mind paying 6 to 10 per cent above their budget for a house in the right school district. However, even if you want to sell at a later year, you can make more on the sale.
Frequently Asked Questions
How much do I need to save for a down payment?
Saving for a down payment is a difficult task for first-time home buyers. Most lenders will require between 5% and 20% for the down payment. However, this depends on the lender’s condition, the type and length of the loan. Make a budget, set a goal and be consistent.
How do I get the best mortgage?
Searching for the right mortgage is sometimes strenuous and time-consuming. Once you get your desired home, you might not have enough time for in-depth research. So, it’s recommended that you check for the right mortgage before searching for a house to buy.
Does my credit score affect my ability to buy?
A credit score is a summary of an individual’s credit account, and it gives a picture of their financial capability to the lender. The lender will use the score to determine who can get a loan and what the interest will be.
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