Are You Ready For Home Ownership?
Like any other life changing experience, buying a home for the first time can seem like an incredible challenge. Owning a home may be your dream, but in order for the purchase to be the happy and satisfying experience it was meant to be, you need to ensure that you are financially and mentally prepared for the responsibilities that come with it.
Some people have a notion that home ownership is like renting, but with the power to have pets and paint the walls whatever color you like. However, while these privileges are available to most homeowners, they come with the responsibilities of a mortgage, taxes and home maintenance. Preparing for home ownership requires you to ask yourself if your income is both adequate and reliable enough to afford mortgage payments.
Questions for Prospective Homeowners
Are you ready to buy?
Owning your own home is about more than just being able to decorate any way you like; it's about being prepared to maintain your home over the years, realizing that part of your income and time will go towards repairs and maintenance. Prior to researching the real estate market and hunting for mortgages, you will need to analyze your family’s goals and priorities. Take some time to reflect and determine if it is the right time to purchase your first home. You may also want to ask yourself where you want to be in the next few years and consider how purchasing a home for the first time fits into your family’s long-term goals.
How much can you afford?
The next important step in the home buying process may seem obvious but is often overlooked during the excitement of purchasing a first home. Very simply, as a first-time home buyer, you need to determine what you can afford. Too often, first-time home buyers underestimate or simply miscalculate the costs of owning a home. It can be discouraging to find that your salary won't stretch as far as the home you want to own. If so, it's better to buy a modest home now and look at purchasing your "dream home" in a few years.
Are you prepared for upfront costs?
There are also upfront costs to consider when buying a home. Though the amount required to cover a down payment and possible closing costs will vary, there are usually some out of pocket expenses to incur when closing on your first home. Being prepared for these expenses, as well as any unexpected costs that occur after you have moved in will help your transition into home ownership.
What is your debt-to-income ratio?
This is something that lenders take very seriously. Your overall debt should not be more than 40% of your income, and your housing debt should not be more than 32%. What 32% of your income will buy depends on where you want to live.
What do you want?
Getting an idea of what you're looking for and what you think you can handle can become a challenge. Do you like the idea of cleaning your own gutters? Do you shudder at the thought of lawn care? Would you rather just pay a fee every month and have everything done for you? Would obeying rules about when you can have your garbage cans out bother you, or do you want to live in a neighborhood where everything is 'just so'? The answers to questions like these can help you narrow down the search for the right type of property for you.
After determining what your family can comfortably afford, you should start shopping around – for both homes and mortgages. By this time, you should have a good idea of what types of amenities you are looking for in a first home and what neighborhoods best match your family’s needs.
We Can Help
To find your perfect match, you need a good agent who will work hard for you. Our real estate team is dedicated to helping you find the right home, at the best price. We want you to find the home that will make you happy and successful in real estate ownership. When you hire us to help you buy your first home, we want to know what you want and how much you can afford. Once we've determined what you're looking for, we'll find a way to merge these two priorities and find a residence that you'll enjoy owning.
As your search advances, your agent can help you attend some open houses within your neighborhoods of interest. Even if you don’t find the perfect home right away, being active in the market will give you a better chance of finding the best fit for your family.
Keep your objectives in mind when visiting a home. Sometimes the idea of owning a home can overwhelm your practical sense, so try to keep your feelings in check. Keep a list handy of the features that you need and want in a home, and judge each home by the list instead of by details that could distract you from your goal. When you're alone with your agent, you can go over the pros and cons of each home. We can help you stay on track while still keeping our eyes out for a great property.
Engage the services of a good real estate lawyer. We can recommend several lawyers in the area who might be a good fit for you. Interview them to ensure that you get someone you can work with. The legalities of transferring land ownership can be extensive, and a lawyer can be your best defense against future legal troubles. A good lawyer can charge several hundred to over a thousand dollars for their services, but the thousands of dollars saved in legal fees later on makes this a good expense.
Make the offer. This can be a maze of "buyer", "seller", "chattels", "deposit", and "completion". We'll be happy to prepare the paperwork and go through it with you before submitting it. Remember, the seller may reject or counter your offer, so even at this late date, avoid setting your heart on the home you hope to own. You'll probably have to write a deposit check to the seller's broker that proves the seriousness of your offer.
Get all necessary inspections done. A home inspector will check for signs of harmful materials like asbestos, lead paint and mold. They'll also check for evidence of pests, faulty wiring and leaks. This is a crucial part of the home purchase. Not getting an inspection done means that you could be stuck in a home with a bad case of black mold and no recourse other than to pay for its removal. Inspections will cost a few hundred dollars, but again, this is more than worth it in the end. There are several inspectors in the area that we'd be happy to recommend.
Do a final walkthrough before closing the deal. We'd be happy to do this with you to make sure that everything agreed upon is completed prior to the final signing.
From the first interview that determines your requirements to the moment that you receive the keys, we can help you with the complicated process of buying a home. Don't hesitate to contact us to find out more about how we can make the home buying process easier!
Contact us for more information about first time home purchasing.