Buying a home is always going to be an exciting experience. You finally get a place that you can call your own. Despite the many challenges that have faced the real estate industry in the last two decades, homeownership is still part and parcel of the American dream. The process of buying a home will not be a smooth one. There are some common pitfalls that you’ll need to avoid if the whole process is going to be successful. For a first-time homebuyer, there are a couple of considerations to have in mind and we’re going to highlight some of them.
Pay Off Debts
You could be setting yourself for financial suicide if you decide to buy a home when you’re still in debt. It is advisable to clear off all the debt before you can apply for a mortgage. There are some expenses that will come with homeownership and sometimes it is practical to rent so that you’re getting your house in order. You’ll need to have an emergency fund when you buy a home as you can never know what will happen. You don’t have to be caught off guard. Paying off your debts means that you can set money aside even when you’ve purchased the house.
Determining How Much You Can Afford
It will not be advisable to go out shopping when you’re not sure how much you can afford. You can easily do so by checking your monthly budget. It is also recommended that you’re getting a preapproval letter so that you’re sure about the house that you can afford.
Save For Down Payment
Even if you’re buying the home using a loan, you’ll be required to pay the down payment. There are lenders that can accept up to 3% of the value of the home as a down payment. When you pay a sizable amount as a down payment, you’ll not have to worry about private mortgage insurance. It will be tempting to go for a 30-year old mortgage because of the low down payment. You could end up paying more in the long run. If you’re qualified, you could also apply for USDA financing which can finance up to 100% of the home’s price without the need for a down payment.
Getting the Right Buyer Agent
Getting the right agent will play a big role in the success of the purchase. The work of the agent is to ensure that you’re getting what you’re looking for at affordable rates. Such an agent will be working in your best interests at all times. Getting the Best Buyers Agent in Brisbane requires that you’re doing research. You should never rush the process thinking that all agents are the same. The buyer agent should be experienced and knowledgeable about the area where you want to buy a house.
Pick the Right Neighborhood
You need to be selective with the neighborhood you choose. Buying a home is a long-term commitment and you don’t want to make a decision that you’ll end up regretting. There are some neighborhoods that will be out of reach because of the prices but that doesn’t mean that you can’t get somewhere that ticks all the boxes. Research about security and nearby schools if you have a family.
Take Advantage of Open Houses
When shopping around for open houses, take note of the condition of the home. Are there any awkward smells or stains? An open house will be the perfect opportunity to examine the weaknesses of the home.
Knowing Limits With Home Inspection
Most first time home buyers will not know the limit when it comes to home inspections. Not all inspections will be thorough. Just because you paid for an inspection doesn’t mean that you’ll get tests for radon or pests. Make sure you’re vocal about what is being inspected so that you know what to expect right from the beginning.
Closing Costs
You’ll need to save for closing costs too. This is something that a lot of people are not aware of when they intend to buy a home. You might be wondering how much you’re expected to pay for the closing costs. Closing costs can be up to 4% of the value of your home. This can be a big cost if it is not planned for. The down payment will not be the only thing you should be worried about.
Make sure you’re saving for both the down payments and the closing costs so that you’re not having issues down the line. Ultimately, doing research will save from making mistakes as a first-time homeowner. You can reach out to someone that has gone through the process before providing guidance.
