Purchasing a home can seem very daunting as a first-timer. There are so many prerequisite tasks and requirements which need to be taken into consideration, with the addition of a substantial financial risk, it tends to be highly anxiety-inducing for most.
The stress of buying your first house is undeniable, this article aims to relieve some of that stress. In order to make the process more easily approachable for you as a first-timer, here are some simple tips & tricks to demystify what you need to consider and what you can expect along the way.
The following tips will help you make the most out of your first house purchase through the means which you have at your disposal.
Determine If You Are Ready To Buy a House
Sometimes your desire to make a purchase, whether a house or otherwise, can lead to decisions being taken without enough careful consideration. Homeownership costs aren’t limited to just the price of a house, additional costs like home repairs, basic utilities, and garbage pickup just to name a few, need to be carefully analyzed.
Even more so, an unfurnished house will mean you need to incur the costs of new furniture, appliances, decorations, and more on top of the costs mentioned above. You will also have to pay for insurance and taxes related to your home, all these costs rapidly accumulate and can potentially leave you in financial ruin if you are not adequately prepared.
It’s also important to be sure not to let family, friends, or even realtors rush your decision-making process. Take your time and be meticulous with your planning as purchasing a home is one of the most significant purchases anyone can make.
Take Advantage of First-Time Buyer Benefits
One of the quintessential aspects of the American dream is buying your first house. As a first-timer, you are fortunate enough to have the luxury of special perks and benefits that more seasoned buyers do not have at their disposal. You have access to federally backed loans, state programs, and tax breaks, amongst other incentives offered by the real estate market itself.
Many states, provinces, counties, and cities offer comprehensive first-time buyer programs. These usually consist of low-interest mortgages with down payment assistance, as well as closing cost assistance too. Utilizing these programs can make the financial aspects of purchasing a house less of a burden, allowing you to focus more on other factors and goals you wish to achieve.
Explore Different Loan Types & Options
Though some may have enough savings to invest in a house, most people tend to require a loan when purchasing their first house. Getting a pre-approved mortgage before you begin looking for a house can give you an idea of how much you can afford.
Another option at your disposal is using a mortgage broker, this can streamline the process of exploring several different loan programs and companies separately. A broker will gather the best options available to you, so you can then find the best rates without the need to study the vast array of options available on the market. Do note that a credit union or local bank may also offer options that could help you save money as well.
A good rule of thumb to keep in mind is to keep your mortgage, in addition to your insurance and taxes, between 25 and 30 percent of your income. Another recommendation by experts is that the price of your house should not exceed two and a half times your annual salary.
Find a Good Real Estate Agent
Once you’ve finalized how much you can really afford to spend on a house, and you’re pre-approved for a mortgage, it’s time to look for a real estate agent. Let’s assume you’re looking to move to a city in Canada, say Edmonton for example. A seasoned agent should be able to carefully take note of all your specific wants and requirements, then make recommendations of houses for sale in Edmonton or explain what’s on the market accordingly. Once you’ve made an offer, your agent should also help with negotiations until you can reach an agreement you are comfortable with. They will also help to guide you through all the processes and paperwork that follow to seal the deal.
A top tip is to search for a buyer’s agent, as they are bound to work in favor of the buyer, in this case, yourself. On the contrary, a listing agent is more inclined to work in the seller’s favor and ensure they can make as much money as possible on the house they are facilitating the sale of.
Consider a Home Inspection
Once you’ve found a house that ticks all your boxes, it’s wise to get the house inspected by a professional. A home inspector will conduct a thorough search of the house from the top-down, inside, and out. They will identify problems and notify you if there are any which are serious enough to prevent you from purchasing the house. For example, issues such as damaged foundations, termites, mold, or a roof that requires renovation.
A thorough inspection can help save you thousands by avoiding necessary repairs down the line. It can also give you the ability to negotiate a lower price with the house owner if major repairs have been deemed necessary by the inspector.
These simple tips are by no means a comprehensive guide but should help you fill some of the gaps, if not add to your existing house-buying knowledge. It’s very important to keep in mind that the more you educate yourself on the matter beforehand, the less stressful and more likely it will be that you are able to obtain a house fitting to your taste and requirements.
When it comes to taking a step in one’s life as major as buying their first house, it must be done with justified confidence. Be sure to take as much time as you need and invest in taking as many precautionary measures as possible, before making this life-changing decision.
