Before I even talk about the most important points to consider for first time home buyers, I want you to understand “Is it that time of your life when you can plan your first home“. Trust me this is going to the costliest asset that you have ever purchased and you have to babysit it for many years to come.
Yes, you heard that right. You were on the other side of the court and now you will be a homeowner. Means, you will have to fix or get fixed every little thing that breaks or needs attention. Based on your financial condition and fund flow you will have to continuously keep upgrading your home from time-to-time. By doing so you add value to your property and hence build equity at a faster rate.
Are you up for the challenge?
Guess so, as you are still reading this. So lets start your journey to your first home.
5 Point Checklist For First Time Home Buyers
The idea here is not to scare you, but prepare you for this purchase with a much more practical approach.
- Are your current debt under control?
This is by far the most important thing to understand. You do not want to buy your first home just because your friend or a relative purchased a home. Sort out smaller accounts, before you enter this long term commitment. If you can foresee an expense in near future like for kids or for car etc. then plan that prior to entering this phase of being a homeowner in a hush-hush.
- How much of a home can you afford?
This is practically the first step in the direction of buying your first home. Get in touch with a lender, he will look into your current credit, income and debt status and will pre-approve you for a certain amount. This pre-approval is your purse to start the shopping. Do NOT plan to spend all of it. Ideally you should look for homes no more than 60-70% of your pre-approved amount. Like if you are approved for 200K, then do not plan to spend more than 120K – 140K on the home. That way you will always stay ahead of your debts and also build equity in your home pretty quickly.
- Shopping for the homes
Ask your lender for an agents referral and they will introduce you to a local agent. Yes, you will need an agent as they are in the market and have better insight on rates and also they take care of all the paper work, title clearance and what not on your behalf. Here you are the boss, do not fall for a house half-heartedly, keep looking till you find the one which you can say “This Is My Dream Home“
If your agent runs out of options, probably it is time to look for another agent. Also keep option open for nearby locations, you never know as you may strike a better deal.
- What to look for in a house?
Location, location, location!
Correct, you can change flooring, roofing, doors, windows etc at any later stage, but you cannot move the house around to a different place. So make sure the property you settle for has ideal approach to highways, is near to schools, hospitals, markets etc. You better know your situation in this regard.
One more thing, do not fall for size. A 3BD house in a good location is far better than 4Bd in a far off location. Moreover, good location property helps you build equity at a faster rate in irrespective of market conditions.
- Making An Offer
This one is tricky, if it is a hot sellers market then you need to act quickly. Personally I do not advice on making instant decisions if you are a first time buyer. Listen to your agent, if they say it is ok to put in a offer for the asking price then go ahead. Be assured you will most probably not get any seller concessions or any kind of cosmetic requests accepted in the sellers market.
On the flip side, the scenario is ideal for first-time homebuyers as they can get concessions, closing assistance and/or a request or two to fix up something within the property like flooring, or wash room or windows etc.
Those pretty much cover the most important points for first-time homebuyers. What follows next is getting the home appraisal, contracts, inspections, and the actual loan process which take their due time till you get a call from the lender for the actual closing date.
If you need any assistance with a home loan, fill in the form below and lets get started you on your path to your first home.