Buying your first home often feels like a significant milestone. For most new homeowners, it’s the result of many years of sacrifices and carefully saving every cent. It’s an opportunity to finally get a say in how to make your property work for you and build up equity for the future.
However, you’ll also need to shoulder a lot of responsibilities when you buy a home. It’s a significant investment and any mistakes will have lasting repercussions. If you want to put all the chances on your side for your first experience as a homebuyer to be a triumphant one, keep reading.
First Time Homebuyer Advantage
New homeowners may feel intimidated by the homebuying process. After all, it’s often your first major financial decision. The amount of paperwork needed can be overwhelming, and you don’t have access to the same equity other property owners have.
However, there are many advantages to being a first-time homebuyer as defined by the U.S. Department of Housing and Urban Development (HUD). Many states have set up programs and grants to help individuals acquire their first home. Depending on your location, you may qualify for homebuyer help, such as personal loans and assistance programs to pay for closing costs or a down payment.
Depending on your income, credit score, and the property you’re planning to buy, new homeowners may also qualify for advantageous loans with low or no down payment.
What You Need to Know Before Buying Your First Home
Buying your first home is not something you can improvise. You’ll likely need to put a lot of time into researching the best solution for you.
Your budget will likely be a deciding factor in where you can buy and what type of housing you can comfortably afford. It’s always best to know your budget by getting pre-approved for a loan before going house hunting. Your financial health, including how long you have been employed, your credit score, how much debt you carry, and the size of your down payment, will play heavily in the mortgage you will be approved for. If it’s not enough to buy the property you’re aiming for, it may be best to wait until you’re more established.
However, the loan amount you are approved for may be higher than what you can comfortably spend. Your mortgage only represents one part of your housing budget. As a new homeowner, you’ll also need to consider the cost of taxes, maintenance, HOA fees, and so on. The cost of homeownership may come with a sticker shock.
You will also need to take a good look at your current lifestyle and any plans for the future. If you see yourself relocating or undergoing a significant life change in the next few years you may be better off waiting rather than buying.
As a first-time homebuyer, it is best to work with an experienced real estate agent who can guide you through the homebuying process. Take your time in interviewing candidates to see who the best fit for your family may be.
How to Nail the Homebuying Process
The home buying process is often a story of highs and lows, excitement, and disappointment, especially if it’s your first time buying a house. After finding your real estate agent and getting pre-approved, explore the communities around you and establish a list of needs and wants for your future home. Depending on the real estate market in your area, your real estate agent may recommend adjusting your expectations or expand your search to other locations.
Visiting new homes can be exciting at first, but you’ll get burned out rapidly if you don’t stick to your criteria or check out properties well above your budget. Once you have found the perfect place, it’ll be time to make an offer. Your real estate agent can help you decide how much to offer, which contingencies to ask for, and so on. They’ll also direct the negotiations with the other party. In a sellers’ market, you may need to put in several offers before one is accepted.
Once your offer is accepted, buying a home often feels like a waiting game. You will need to fill up a lot of paperwork to secure financing and hit every deadline on time. You will also need to set up a home inspection and carefully examine the report. Depending on the results, you may need to renegotiate the terms of the sale.
Closing on your first home can be both exciting and stressful. Make sure you’re providing the necessary paperwork on time and get ready for moving day.
What Happens After You Buy Your First Home
So, you finally bought your first home? Congratulations! It’s the beginning of a new, exciting journey as a homeowner. Owning a new home may have a learning curve as you get used to managing the property, staying on top of the maintenance, and so on. If you’re not handy, you may want to keep contact information for reliable contractors in your area close by. Keeping your home in good shape ensures that it stays safe for your family and that it will keep its value in the long term.
Even if you’re not planning on selling your home right away, you should still treat your home as your most important investment. After all, as you build up equity in your property, you may be able to get access to it later if needed by getting a second mortgage or selling the house. Therefore, it’s best to keep track of the changes in your local real estate market, the interest rate, and so on. By consistently working on reducing your debt, increasing your credit score, and increasing your equity on your current property, you set yourself up for success for your next move.
Your first home represents a lot more than four walls and a roof. It’s a symbol of success, perseverance, and most likely your most significant investment to date. As a first-time homebuyer, you’ll face unique challenges but also benefit from homebuyer help programs. A good real estate agent will help you make the best move for yourself and your family, both in the short and long term.