If you ask a homeowner what it was like to buy their first home, they’ll probably mention a few things they’d change if they could do it all again. While it’s impossible to know everything about the home-buying process beforehand, you can still prepare yourself for what lies ahead—and figure out how to avoid some potential pitfalls. Not sure where to begin? Here are some key pointers to keep in mind before starting your search.
You’re Buying More Than a House
We all know the phrase “love at first sight,” and it can certainly apply to homes, too! Even if you step inside a home and instantly fall in love, it’s crucial to step back and consider the whole picture before making a purchase.
When you buy your first property, you’re investing in more than just four walls. It’s worth paying attention to things like a home’s location, neighborhood, and physical condition, too. Even if you find that open concept kitchen you’ve been dreaming of, it might not be the right fit if it’s in the wrong community or if the rest of the house requires out-of-budget repairs. It’s best to stay realistic and listen to your agent’s (and home inspector’s) advice. Remember, this is likely one of the biggest investments you’ll ever make, so spend your money wisely!
Down Payments Are Different for Everyone
So many would-be buyers are scared of home ownership for one reason: the down payment. Traditionally, you’d put down around 20% on a home and spend anywhere from 10 to 30 years paying your lender back. However, you actually have more flexibility than you might expect.
Depending on your credit history, location, and occupation, you could be eligible for loans that require as little as 0% down. However, making a larger down payment means you’ll pay less interest to your lender in the long run. Be sure to shop around for the right fit and reach out to your agent with any questions—they’re always available to help you out.
Prepare for Extra Expenses
Home ownership often comes with unexpected expenses, especially right after you move in. When you’re setting a budget for your big purchase, consider adding some wiggle room to allow for any additional and long term costs. You don’t want to realize that you can’t afford your home after you’ve purchased it!
Wondering what kinds of expenses can come up? Inspections, homeowner’s insurance, prepaid taxes and other various closing costs, HOA dues, and repairs are just a few possibilities. You’ll pay for some of these before or at the closing, but certain recurring costs will have to be factored into your monthly budget.
Get Pre-Approved Before You Start Searching
Once you’ve made the decision to buy, it’s tempting to start looking at listings right away. However, you might want to press pause and complete an essential step before you start scheduling showings. Getting pre-approved for your loan will show sellers and agents that you’re serious about buying—and it can tell you exactly how much you can afford to spend.
Ready to start the pre-approval process? First, you’ll want to get your finances in order and shop around for the right lender. Be sure to have all of your important documents on hand, such as your W-2 tax form, paystubs, and social security card. Most lenders allow you to apply online, and within a few business days, you’ll know whether you’ve been approved or not, as well as the conditions of the loan.
Are You a First-Time Buyer?
Buying your first home is a big deal, and it’s important to have the right agent by your side throughout the process. If you’re ready to start your search, feel free to reach out to us with any questions at 734-761-3060 or info@bouma.com. We can’t wait to help jumpstart your journey to home ownership!