Purchasing your first home is one of the most important events in your life. It is a huge financial step so you have to be careful and patient to safely undergo this process because the lack of experience might cost you a lot. Read every guide you have at hand and prepare for a lot of legwork and savings. This decision can be sometimes hasty when you let yourself pushed by your parents, friends or colleagues’ opinions, which can be downing and discouraging. You are not the first who experiences that crisis so, instead of getting pessimistic about it, take into consideration what others say, but at the same time, build a solid plan and be aware of your needs. For millennials, buying a house is way harder than it was for their parents because the value of homes has increased since the 1960s by 73%. In order to make this process manageable, you must follow these simple steps:
Start an early research process
Buying your first home is a big deal. You should determine whether you are ready or not. It can be a lot more expensive than renting since you’ll be in charge for added cost like utilities, home repairs, electricity, waste management and even water, let alone the insurance related to your home and taxes. All these costs can bring you in a bad position if you’re not financially prepared yet. Start looking for a complete guide to understand the whole deal, ask questions, find solutions by talking with more in-depth people. Make notes of particular homes that spark your interest and observe their duration on the market. This way, you’ll develop a sense and understanding of your needs.
Look only for the affordable options
You should not bite more than you can chew. This rule is available for every new home-buyer who gets overwhelmed with options, ideas and preferences. Set some real goals and don’t throw yourself over the first deal. Lenders recommend buyers to search for houses that cost less than their annual earnings if they plan to make a down payment and obtain a balanced amount of other debt. You should make this decision based strictly on your financial status and not dream over unreal situations.
Get credit if you need
You’ll need to know how much you can spend. Setting a credit score is essential because this will determine how much money you can borrow and whether the lender is inclined to lend you money or not. This might be based on your credit history which is how much money you’ve borrowed in the past and how you’ve managed your debts. You should consider building this score before you pursuit to borrow money. Based on these incomes you can find out the price range of the houses you should be looking at.
Consider a Real Estate Agent
If you’ve decided to buy a house, a real estate agent is an essential partner. He can provide lots of information regarding homes and neighbourhoods, that are not accessible to the public. They have the expertise of the home buying process, familiarity with the place you want to move in and important negotiation skills. Get a feel for your local real estate and plan together what features you can obtain based on your budget. The best part is that it won’t cost you anything. Real estate agents get compensated from the commission paid by the seller of the house.
Start doing some savings
It may sound complicated but in reality, if you’re putting your dreams first, it should not be an impediment. You should learn to cut back on some expenses and develop a strict monthly budget. Decide your priorities and find solutions to spend less. Use low-cost or free events to reduce your entertainment costs, cancel memberships you don’t use and give yourself a cooling-off period to reduce the unnecessary purchases. Also, having a financial coach could be handy because he will certainly advise you to open a separate account. You should constantly review your budget and check your progress. In this way, you’ll identify and fix problems, and you’ll understand how this process can inspire you to hit your goals faster. Think of the bigger picture, this old-fashioned process might be the key to buy your dream house and will save you from the rent nightmare.
Arrange a Home Inspection
When you’ve decided and listed a few preferences, your real estate agent will arrange for you to have this inspection before your offer to be accepted by the seller. This process makes it safer for you, by allowing you to withdraw or renegotiate your offer without any problems if the house you’ve visited reveals important damage. After the visit, both the seller and you will obtain a report based on the home inspector’s findings. You should not be concerned with the number of defects listed on your report, most of them are minor but in change, pay attention to the real home issues. Some of them can be real deal-breakers. To find the best ways, you’ll first need to consult with your agent or home inspector. Before closing the sale, you’ll have the chance to confirm that repairs you’ve agreed upon, have been made.
When the sale is closing and you’ve received your expectations, be prepared for the paperwork. It generally takes a couple of days for the loan to be funded, after that the paperwork returns to the lender. In the end, when the check is delivered to your seller, be prepared to move in your new house.
Be sure the steps you’re doing in buying your first home are accurate and you didn’t miss something important. For many this process can be downing, but when you’ve set aside the right savings and found the experts you need it becomes something achievable. Listen to your needs and have patience. Every first home-buyer gets through the same insecurities and problems.