Things to know when buying home for the first time

Buying a home for the first time is one of the biggest purchases you are going to make in your life.  It can be a challenging task, and choosing the first one that seems to have a nice price tag will not make your life easier.

Don’t rush into home ownership just because you like the idea of being an independent adult. It’s a serious investment in the future, and it needs to fit in with your long-term plans. If you take time to educate yourself and plan ahead, the whole ordeal will be much less stressful.

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Numbers game

Being your own landlord has many advantages, but it’s also a big commitment. First, you need to know what you are getting yourself into. You should access your budget, and get a clear picture about your assets and liabilities. The chances are, you will need a loan to complete the deal.

See how much mortgage you can count on. Lenders, of course, will be the judge of that, and the amount depends mostly on your other debts and your income.  Note that with a better credit score you can qualify for a more favorable loan offer.

Check out also the government-backed loans or state programs for first-time homebuyers. Don’t go overboard in any case, and evaluate how much money you can afford to spend. It’s best if you can ask your parents or other family members to help you with the payments without tax consequences.

Plan in advance and keep an eye on monthly payments and the total cost of the property, as well as mortgage interest rates.  Don’t overlook the future costs like property taxes, insurance, and expenditures for home improvements.

Is this estate for real?

A good place to start the search is to decide which type of residential property you would like to live in. A townhouse, a traditional single-family home, or a condo, they all have their pros and cons.  Think about your needs and wants. Everything counts, from the surrounding neighborhood to the layout of the bathroom.

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You can search for listings online, or drive around town seeking the for-sale signs. A lot of those signs in one area signal that the prices are depressing there.  It would be wise to scout for properties that are in foreclosure, because they are often not advertised. Be cautious though, as there are some too-good-to-be-true offers and many potential frauds floating around.

You might need somebody to help you find the right offer, and guide you through the whole purchasing process. It’s good to have a professional on your side while negotiating, making an offer, and filling out the paperwork. There are also some legal issues like conveyancingthe transfer of legal title and propertythat require some time and knowledge. If you find that part confusing, an agent will make sure to explain the details.

A sign of good faith

Upon reaching an agreement, you will be asked to make a good-faith deposit after which the process enters an escrow phase. During this short period the seller takes the house off the market and makes other preparations. Next important step is to inspect the condition of the home. If there are some considerable defects that the seller didn’t disclose, you can cancel your offer and get your money back. In case everything is in order, you can close.

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After signing a ton of paperwork, you can become a proud new homeowner.  Yes, the party can start, but you should be vigilant. Always maintain your property and try to cut your long-term home ownership costs. If you play it smart, buying the new home can turn out to be a great investment. It could also become one of the best decisions you made in your life.

Sounds like a deal

Buying a new home for the first time is both a nerve-wracking and exiting experience. It’s a big deal, so it’s also a time to get real.  Before taking the plunge, decide what your home ownership goals are and do the financial homework.

Owning a home is not always a smart move, money-wise, and can make a mess of your budget. If you need help to navigate these waters, seek out a real estate agent. Know that there’s nothing like settling down in your dream home knowing that you’ve made a good deal.

About Diana

Diana is a part time blogger interested in topics related to home improvement and home decoration. She is also a great animal lover and simply loves taking long walks with her little dog LuLu.

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