5 Basic Rules for Buying Your First Home

A Guide to Buying Your First Home

Are you buying your first home? Then before you ever set out in search for the perfect home, you should keep these basic home buying rules in mind.

Buying a home is a serious financial transaction. There’s a possibility that it may be the largest transaction you make in your life. So you’ll want to get it right the first time. Here are some guidelines to follow when buying your first home:

Location, Location, Location

Before you decide to buy a home, you should get to know the local area. What’s worse than moving into your second choice home? Moving into your dream home only to find out there’s something terribly wrong with the neighborhood. In this case, had you known about the issue, your second choice would’ve actually been your first. Buying your first home in a place like the Tampa Bay area requires you to do a bit more research into locations next to the water that are more vulnerable to flooding and water damage due to heavy rains.

The Price is Just Right

Buying a house that’s too expensive is going to cost you for the rest of your life — unless it’s so much trouble you decide to sell. Keep in mind there are risks in assuming you can sell at the same price you paid for it, especially as more time goes by and the home grows with age. Most mortgage payments are set up to be repaid over decades of time. This means it’s never a good idea to stick yourself with a ridiculously high house or condo payment when you could end up miserable for an extended number of years.

Always remember that there’s more to buying a home than the upfront costs or mortgage payment. Through the years you will also owe property taxes, possible condo fees, homeowner’s insurance, utilities, repairs, and any maintenance needed. Buying at the top of your price range may put you over budget much quicker than expected when you take into consideration the “hidden fees” of owning a home.

The first time a major issue takes place such as the plumbing breaks, you’ll know why it’s best to leave some funds in the reserves.

Don’t Buy without Good Credit

Chances are you’ve decided to buy a home because your credit is established enough to afford a loan with the lowest interest rate. It’s really not worth getting hit with a high interest rate when you could just focus on your credit score and raise this before making a purchase.

The fact that your credit is “poor”, “fair” or even less than “excellent” may indicate that you should wait. The reason being is that you are hitting yourself twice with higher interest and higher payments when you already have less resources available to spare. Take time to think things through before buying on less than ideal credit.

Save for the Downpayment

Who needs a lifetime of mortgage payments when you can own your home sooner? You should be saving up for the downpayment years in advance. Why? Because it’s one of the smartest choices you’ll ever make by not only putting you in a much closer position to owning the home at the time of purchase but at the same time lowering the expected monthly payments and cutting years of interest off the time it takes you to repay the mortgage.

Are You Losing Money on the Fixer Upper?

Some imagine a vision of what the new home may look like in years to come. But is this an economically feasible way of going about buying a home? After purchasing a “fixer upper” home in hopes to make improvements later, you may find that you’re in over your head.

The repairs needed may actually end up costing you much more than you bargained for had you just invested in a home with a better starting condition. Unless you bought the home for a specific reason (you just absolutely loved the wooden floors or the location), then the price it costs to fix the home may not be worth the initial purchase when it’s all said and done. This becomes true when you lack the experience necessary to carry out the home improvements yourself.

Before you decide to buy a home that needs remodeling and repairs consider your own ability to handle these matters. If you are not a home improvement expert, chances are that you’re going to have to hire a someone to remodel your home, and you are going to lose more money this way. It’s best to carry out a thorough inspection and estimation on the costs it would take to make the repairs, since these things add up quick!

Without good title insurance, you might not even own your home.

Get a “clear title” when moving into your dream home. BNTC is here to offer a better closing experience for homebuyers and lenders. Contact our team of experts to learn more about the best title insurance policy for you.

SOURCES:

The Newbie’s Roadmap to Buying a First Home

4 Smart Steps to Take Before Buying Your First Home