While putting down a deposit on your first home can be an incredibly exciting time, it can also cause stress amongst first-time buyers who aren’t sure of the process and the expenses involved. It might seem like there’s a world of new information to get across if you want to make a good investment the first time around, but if you follow these tips, you’ll be off to a good start.
Location really does matter
It turns out that there’s some truth to the old real estate agents’ mantra, “Location, location, location!” Spend time in the place you’re looking at buying in before you commit to purchase to make sure your lifestyle lines up. Also consider things like your proximity to work, school, and any important social commitments, and whether the property you’re considering is close enough to everywhere you need to go. A great location can save you a lot of time and money which would otherwise be spent on commuting.
Stick to your budget
When you finally come across that dream house, you’re likely to feel tempted to put more money on the table, but this could come back to bite you. If you overpromise when it comes to your capacity for repayments, you’re more likely to land yourself in financial trouble with your lender. Do up an all-inclusive budget for your earnings and expenses and stick to it as closely as possible, and you won’t need to worry about not being able to afford the essentials. Including things like food, bills, and any unpaid debts to your name should keep you out of trouble.
Educate yourself about rates and loan types
Working out how much you’ll need to have available for an outright payment and roughly what your regular repayments will be will let you know whether you can afford your dream home, but there are other decisions which could impact your situation. When you’re researching and comparing home loans, you’ll want to explore the different loan types available to homebuyers. Conventional loans are a popular choice, but if you have a less than impressive credit rating and less finance for a downpayment, an FHA loan may be the best option for you. You’ll also need to decide whether you want to undertake a fixed-rate mortgage, where your repayments remain consistent, or an adjustable-rate.
Get your finances in order
If your credit rating isn’t looking as shiny as it could, you’ll want to invest some time and energy into it before you sign on the dotted line. A great credit rating opens up plenty of options for buyers, from the type of loan to larger loan capital. You can improve your credit rating by consistently paying bills on time and chipping away at any loans you already have, although you can expect to wait a year for a clean slate after any late payments.
Patience is key
When you’re hunting for your first home, it’s important to keep in mind that you’re very unlikely to fall in love with the first property you inspect, and even if you do, you may not win the contract the first time around. Keep your expectations in check and remember that finding a great match for you and your family will take time.
Preparation also helps
One of the best ways to squash any lingering nerves is to make sure you’re fully informed and prepared before you attend a viewing. Start by doing some research to find out about the types of properties currently on the market and the average price range, and contact agents directly with any questions you might have – this will save you precious time when it comes to inspecting your prospects. Once you see something which seems to fit your criteria, book an inspection time with the agent as soon as possible, and arrange your paperwork and references. The more you can organize in advance, the greater your chance of getting your foot (or key) in the door first.
Finding a first home can be a challenging process, but if you follow a set of clear steps and enlist the right help when needed, you might just avoid any unexpected extra challenges. Put in the necessary time and do your research, and your reward may be better than you expected.