Buying your first house? Follow these tips to make the process less daunting
Dec 03, 2020 22:57
Getting ready for your first home purchase can be a daunting and frightening process. Mortgage, down payments, real estate agents, house visits – all these aspects can feel overwhelming, especially for first-time buyers.
But even though the process is stressful, finding your dream home can also be one of the most satisfying moments of your life. Big projects are all about details, and getting these details right from the beginning will make buying a house a bit less challenging.
The following tips are meant to help you navigate the process a little easier, and find a deal that suits your needs.
When you start saving for a house, keep in mind there will be other costs besides the price of the house or the down payment. You will have to consider move-in expenses, closing costs, inspections, and the real estate agent’s commission.
When it comes to the down payment, its value depends on the type of mortgage you choose, as well as the lender. In some cases, for conventional loans for first-time homebuyers with excellent credit score, the down payment can be as little as 3% of the mortgage value. But sometimes, even a 3% down payment can sometimes be challenging to save for. Take, for example, a $300,000 home, for which a 3% down payment would be $9,000 – not exactly pocket money.
The fees and expenses you are going to pay when you finalize the mortgage are also to be taken into consideration. Usually, they range from 2% to 5% of the loan amount. This is another $6,000 to $15,000 that you will need to have laying around.
After you purchase the house, you will need to set some money aside for repairs, upgrades, furnishing, and the overall move-in process.
Check your credit score and explore mortgage options
Before you go looking for a mortgage, it’s worth checking your credit score, to determine exactly what type of mortgage you qualify for. If your credit score is a bit crooked, the following steps can help you strengthen it:
•Check with credit bureaus and see if there is any error that can hurt your score. Get copies of all your credit reports and have them on hand when talking to the lender.
•Keep your credit balances as low as possible and make sure you pay all your bills on time.
•Don’t close current credit cards, even if you paid them. If you do so, it can increase the portion of available credit you can use, which actually lowers your score.
After you ensure your credit score is as good as it can get, it’s time to start looking for mortgage options. There are plenty of mortgage types available, with various eligibility requirements, so make sure you do your homework before jumping in to sign a deal.
Fortunately, you don’t have to drive around town picking up offers from lenders, because you now have the internet as your best assistant. Use a home loan comparison tool and compare multiple types of loans, to ensure you choose the one that suits your needs best.
Choose an agent you trust
If you choose a good real estate agent, half of your problems are already gone. They will search the market for homes that suit your needs, set up meetings, guide you through negotiations, and help you close the deal.
Start researching agents in your area and narrow your list down to 2-3 options. Don’t go for the most praised one, as they are not necessarily the ones that will suit your needs best. Instead, ask for referrals, read about them online, then interview a few agents before making a decision.
Ask about the agent’s experience with first-time home buyers and how they plan to help you find your dream home. Choose an agent you feel has your best interest at heart and won’t have a problem negotiating to your advantage.
Pick a house that suits your needs
When you start going to open houses, take into consideration your budget and lifestyle and make a list of all your requirements. Then, compare homes weighing in the pros and cons, and try to understand the different types of homes you will be visiting.
For example, a condo or a townhouse may be less expensive than a single-family home, but living so close to your neighbors means less privacy. At the same time, a single-family fixer-upper in need of repairs will also be less expensive, but requires a bit more work with the renovations.
Take into consideration the neighborhood as well, and check to see if it has all the amenities you need, such as schools, grocery stores, and recreational areas. You are definitely not buying this house only so that you can move out a few years later because you are too far from the kids’ school.
Try to stick to your budget, but don’t hesitate to be a little flexible if you find a house that really suits your needs and is only a bit over the initial budget. Your agent will know when it’s worth going a bit over budget for a good deal, so talk to them about it if necessary.
Pay for a thorough inspection
Even if the seller says they did a home inspection before putting the house up for sale, it’s better that you take this task upon yourself. This will ensure the house does not hide any issues that the owner may not be aware of, or may try to hide from you.
Talk to a professional inspector and ask them to do a thorough inspection to ensure you make an informed decision.
Don’t go for a standard inspection, as they don’t usually check for things such as pests or mold. Instead, go for a more thorough inspection, to ensure there is no room for unpleasant surprises. Ensure the inspector has access to all areas of the house, including attics and basements, and follow them around to try and understand their findings better.
Being a student is inherently stressful, no matter what you study or who you want to become one day. According to published research, over 40% of students experienced devastating levels of stress and anxiety, with over 50% stating that academic projects are too much to handle. While it’s beneficial to go to college and gain a degree, it’s also important to vent from time to time and entertain yourself, and here’s why: Read more
Amidst all the pandemic madness and the lockdowns, the group of humans that has suffered the most has been the school-going children. Having to stay home in the confines of the four walls with minimum to no social contact with peers, has been infinitely taxing on them. Add to the mix, the online classes and the lonely study sessions with the screen have made academics a burden if not a privilege. Read more
The Pearson Test of English (PTE) is an English language test conducted for non-native English speakers. The ones who want to study overseas can get all the information online regarding PTE tutorials and how to practice PTE daily. Read more