Introduction
It can be exciting to look for a new home, but it can also be frustrating and stressful. Many first-time home buyers make mistakes that cost them money or complete the process more complicated than it needs to be.
Here are some ways to assist you in avoiding these mistakes and make buying your first home as enjoyable as possible.
Get your financial situation in order
To organize your financial situation, there are several things you need to do:
Get a copy of your credit report. You can request a free copy annually from each credit bureau (Equifax, Experian, and TransUnion).
Please review it carefully and look for any errors or mistakes affecting your score.
Check your credit score. There are a lot of free sites where you can get this information, but we recommend CreditKarma because they also provide excellent tips on improving it!
Ensure you’ve got an emergency fund with at least three months’ worth of expenses saved up so you’ll never find yourself in a tough situation again financially speaking once purchasing a home comes along.
Start saving for a down payment
A down payment is usually around 20% of the home price, but it could be more depending on how much you can afford.
You can get a loan for the rest of the purchase price and then use your savings or a gift from family members.
The more your down payment is, the less risk there is to lenders that you won’t pay back their money, so they’ll give you better interest rates on loans with smaller monthly payments than if there were no deposits.
You might not think about saving money until after finding a house and signing papers to buy it—but don’t wait that long.
It’s hard enough without having extra bills hanging overhead when trying to save up money faster than usual.
The sooner you start saving, the better. You’ll have more cash to pay for closing costs and other expenses associated with buying a home.
Get pre-approved for a mortgage loan
What does that mean? Preapproval is an estimate of what you can borrow based on specific financial factors like income, credit score, and down payment amount.
It’s an important step in the home-buying process because it will help you determine how much you can use on the home and which houses are within your price range.
Once you’ve secured pre-approval from your bank or lender, it’s time to start looking for homes. Narrow down your search. Once you’ve got a few homes that interest you, it’s time to decide which one is right for you.
Consider how much space you need and if there are features in the home that will make it more comfortable or convenient for your lifestyle.
For example, if you want to start a family soon, look for houses with extra bedrooms and bathrooms (or consider renovating).
Look for the right home and make an offer
Once you find the perfect home, make an offer. If the seller accepts it and the bank takes your request, you’re ready to move forward with the purchase.
Make sure to have a home inspection before you sign anything to know exactly what kind of shape your new home is in. If there are any problems with the house, it’s better to find them now than after you move in.
Secure homeowner’s insurance
You’ll also need homeowner’s insurance in case of theft, fire, natural disasters, and more. The cost of a policy lies on a lot of factors, including the size and value of your home.
Who is responsible for paying?
What are my rights as a renter?
Should I get renter’s insurance?
What kind of coverage should I have on my car?
Do your research and get a home inspection
It is the best way to protect yourself against a money pit. A home inspector will look at your prospective property and provide an expert opinion on any problems lurking.
A good inspector will do more than identify issues with wiring, plumbing, or foundation; they’ll also suggest ways you can remedy them and offer advice based on their experience in the field.
Home inspections aren’t cheap, but they’re worth every penny spent. It’s better to know about flaws before you buy than after.
Don’t forget that most buyers take out loans for their new homes, so there’s no reason not to cover all bases before making an offer.
A word of warning: if someone offers you an appraisal or structural engineering analysis instead of a standard inspection (or if they don’t even mention doing either).
We would advise against hiring them because these types of specialists tend not only to charge more but also have less knowledge about what constitutes “normal wear & tear” versus something that could potentially cause significant issues down the road, such as mold growth due to improper ventilation around windows/doors where moisture gets trapped inside walls once winter comes around again.
Check out the neighborhood before closing
It would help if you visited your home before closing on it. Not only will this give you a chance to scope out the neighborhood, but it also allows you to ensure everything is in order with the house itself.
Your real estate agent may have already done a property walkthrough, but it’s always good to go back and check things out yourself.
You’ll want to ask neighbors about past criminal activity in the area and what things they see around their homes. Do they feel safe? Do they have any concerns?
Your real estate agent can provide information about local schools, which will also help determine whether or not an area is right for you and your family.
You can also check out local crime statistics online or find them locally by calling law enforcement agencies near where you’d like to buy a home (or where properties are currently listed).
Buying a home is a tricky process with many steps to follow
To buy a home, you need to know the steps. The following are some of the significant steps for purchasing a home:
Researching real estate listings, getting pre-approved for financing, and choosing a lender
Finding out about local laws and regulations
Calculating your monthly budget and insurance costs
Conclusion
As you can see, buying a home isn’t something that should be taken lightly. It’s an important decision with many steps to follow and decisions to be made.
This article should have given you some ideas on how to get started on the right foot when it comes time for your first purchase.
