If you’re planning on making the big move from renter to first-time homeowner, you’re probably going to have a lot on your plate. It’s a daunting thing, buying your first home – but one of the most rewarding. Still, there’s a lot to learn about the process, so below are some tips and reminders that are made to help all the first-time buyers out there get knowledgeable and get organized.
Be prepared to make a commitment
Don’t go into buying a new home thinking that it’ll be just a temporary residence. While you likely won’t be staying there forever, you should still count on living there for roughly 3-5 years. This is because it will likely take at least that long to build up equity in the home and recoup all of your investment costs. Leave before then, and you’re just losing money.
Know what home would fit your needs
Do you have a family? Do you plan on one in the future? How far in the future? Who will be living in your house in the meantime? These are the questions that need to be asked before buying your first home. While it may be tempting to splurge on that 4 bedroom, 3 ½ bath villa, it isn’t fiscally wise if you’ll just be living there on your own. In the end, your budget should reflect your lifestyle.
Look out for your credit score
Credit scores mean more and more now, and poor credit can sometimes totally smother your chances of being approved by a lender. Before you buy, do everything you can to get that score as high as you can.
Make a strict budget
This is really important – with all the fees and little costs of buying your first house, you don’t want to be going over budget with the home itself. Plus, a wavering budget doesn’t stand a chance against that expensive dream house you’ve always wanted. There’s plenty of time for that place later – for now, stick to your budget, and make the smart choice.
After you’ve bought the house, don’t assume you can take a breather with your finances. Owning a home takes a lot more upkeep than renting – now you have to consider taking care of the yard (if you have one), fixing every small issue that crops up (no more asking the landlord to fix the heat), possibly paying for garbage pickup, individual utilities, the list goes on and on. Similarly, once you have a number for your mortgage payment, work that into your monthly budget so you will always make the payment. This will help your credit, and also build up good spending and saving habits that will prove valuable for the rest of your life – especially for the next time you buy a home.