Buying your first house is one of the most exciting parts of becoming an adult. The last hurdle in some cases before crossing that finish line and being welcomed among the ranks of the fully fledged adults of the world.
But, buying your first home can also be an overwhelming experience often invoking a desire to hide under a rock for the next 10 to 12 years. But it doesn’t have to be that way. Buying your first home really should be one of the most exciting moments in your life. It’s your first home, after all! And it’s all yours. Keep reading to discover 5 tips you just can’t live without as a first time home buyer.
1. Paying Off Debt
If you’ve bought a car before or ever been present for the process, you know how important credit score and debt to income ratio is. And that’s to get financed for as little as a couple of tens of thousands. Now imagine financing a home for hundreds of thousands of dollars.
Debt to income ratio is very important when it comes to financing your home loan. Creditors want to know that you will have the cash on hand to pay all your debts, household bills, and so on.
Paying off your debt early will give creditors confidence in your ability to pay off your debts as well as effectively manage your money.
2. Identify Deal Breakers
Everybody has a vision in their head of their dream home. Whether it’s a mansion on the hill, a villa in Italy, or a beach house in Hawaii, you know what you want for your dream home.
But they are called dream homes for a reason. So, compromises will have to be made. Yet, not everything from your dream home has to be cast aside.
This is the time to identify your deal breakers. Those things that your home absolutely has to have no matter what, or those things it cannot have no matter what.
You’ll not only be able to ensure you find the house you want; you’ll also give yourself a starting point in your search for a place to live.
3. Home Warranties
Many houses today are coming with a home warranty. The warranty is purchased by the seller and then transferred to the new homeowner after closing. The benefits to this are, of course, buying a home that comes with a warranty. The warranty will help with the cost of repairs and replacements not covered by the homeowner’s insurance. The downside to this is you don’t have a say in which of the home warranty companies the seller chooses. So, you’re stuck with the coverage they purchased; but still, it’s better than nothing.
4. Find an Experienced Realtor
When it comes to making sure you find the home you want at the price you can afford, you need a realtor. But, not just any realtor. You should always shop around and find the best realtor for your needs. When it comes to buying your first home, you can’t go wrong with choosing the realtor with experience and knowledge. Make sure they know a lot about the neighborhood and the area the house is located in.
As important as the house is, the neighborhood is equally important. You’re going to want a realtor who is going to listen to you and show you houses that match your criteria and wishes while also showing options that you might not have thought of.
As much time as you would put into researching home warranty companies, you should put even more time and effort into finding the perfect realtor for you.
5. Prepare for Closing Costs
Closing costs are always something that looms over a home buyers head. Mostly because they can change at a moment’s notice, resulting in spending anywhere from one dollar to thousands without warning. But you can prepare for closing costs and help alleviate some of that fear of the unknown. On average, closing costs are around 3-4% of the purchase price.
The exact amount in closing costs will be provided by the lender, so you know exactly what to bring. However, that phone call won’t come until a few days before closing day.
You can set yourself up for success by saving up to 3% to 4% of the purchase price of the house.
Buying Your First Home
Don’t let buying your first home be stressful and overwhelming. It should be a joyful and exciting time in your life. Hopefully, these tips have helped you to achieve just that.
Buy your first home stress-free and enjoy all the wonderful things this new chapter in your life will bring.