Are You a First-Time Homebuyer? Here’s What You Should Know
The road to becoming a homeowner can be confusing, especially for first-timers. It entails a lot of legwork, paperwork, and much patience.
Being well-prepared saves you time and money and minimizes unnecessary troubles throughout the whole process. Use these important tips as a guide before and after you find the perfect home. Following them will keep the way simple and painless.
Table of Contents
Before Choosing a House
The process of buying a house begins even before you go house hunting. Good planning will make the next steps much clearer and easier to follow.
Set a budget.
This is a good time to go over your current spending habits and credit report. These two will determine what kind of house you can afford and your capability to make timely payments.
Home loans are only approved for those who have good credit scores. Review your regular payments, credit history, and credit dependence to see how well you are faring. It is ideal for your debt-to-income (DTI) ratio to be 36% or lower, but it can go up to 43%.
When reviewing household expenses, see how much money you have left. This informs you of how much you can pay for your mortgage monthly and, as a result, the house you can expect to buy.
Canvass available mortgages.
There are a variety of mortgages available. Consult with different lenders and compare the pros and cons of getting a mortgage from each.
To guide you, here is a brief rundown of the main types of mortgages:
- Conventional mortgagesare not government-backed. They allow as low as 3% down payments.
- Conforming mortgage loansare regulated by the Federal Housing Association (FHA).
- Nonconforming mortgage loans are not FHA-regulated. An example of this is a jumbo loan.
- FHA loansare for buyers with lower income. These are insured by the FHA.
- Veterans Affairs (VA) loansare available for those in military service and their families.
- U S. Department of Agriculture (USDA) loansare for rural buyers with low income. These don’t require down payments.
Look out for open houses.
A few searches on the internet can give you access to homes that are open for viewing. Virtual tours have become more prevalent in recent times. Take advantage of these to safely explore homes on your own schedule.
Going on virtual tours first is a time-saving method that lets you easily decide which homes to visit physically. When you do a house visit, pay attention to the sturdiness of the structures. Check the current state of the residence to see if it is worth buying.
Tip When you settle for a house, don’t be complacent with your own inspection. A home inspection service will give you a better conclusion about its standing.
After Choosing a House
Now that you have decided on the house you will buy, it’s time to make sure that you are ready for the responsibilities of living in it.
Have the home inspected.
As mentioned above, professional inspection services will do an in-depth analysis of the house you have chosen. Getting expert advice on its condition will help you negotiate the final price of the home and protect you from sudden expenses you may incur down the line.
Some companies also offer additional services that help detect mold, lead paint, radon, and other toxic elements that could be harmful to your family. These could pose health risks undetected, so availing of these is also ideal.
Get home insurance.
Homeowners insurance is critical because it will safeguard your finances from repairs or replacement of your home when necessary. It also covers personal injuries and possessions in the event of an accident or other untoward incidents. Your home insurance should be adequate to answer for all these costs.
Note that these policies usually do not include natural disasters such as earthquakes and floods in their coverages. Should you need one, speak with your financial advisor regarding these.
Maintain it well.
Your house is one of the most significant investments you will make in your lifetime. Regular maintenance will uphold its quality as you live in it.
Hire professionals who can perform periodic inspections and repair parts of your house to make sure it stands the test of time. It may be useful to remember that if you have plans to sell it later, a well-maintained home can go for a higher price in the market.
At every stage of life, your house deserves utmost care and attention. When preserved, it remains a valuable asset that you can pass on for generations to come.