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Tips For The First-Time Homebuyer

March 14, 2023

Or the second, third, fourth time homebuyer…

Buying your first home can be exciting and probably a touch scary as well.

You have saved up your down payment for years, have been smart in establishing great credit, and are ready to “take the plunge” into home ownership. First of all, congratulations! This is a huge step toward solidifying your future both financially and physically. Rosie on the House looks at some aspects of buying your first home and points you may want to consider as you move through the homebuying process.

Budgeting

Start by establishing a plan for your hard-earned money. Mortgage payments naturally top the list, and knowing the amount of your savings will help you establish home affordability. Other costs will also come into play in the budget. Closing costs are the money you need in addition to your down payment. They include loan and title fees, for example.

Home insurance, which insures the mortgage, needs to be included. This can be predetermined and is typically included in your mortgage payment. Probable energy and utility costs for the home need to be factored in. Electric, gas, water, sewer, and trash are necessary basic monthly expenses and vary from location to location. Some research to determine the average expenses in the area you plan to buy will be important. Maintenance costs for HVAC, plumbing, electrical systems, and so forth need to be factored in. Don’t skimp on the research. Move forward with your eyes wide open. Seek professional help if you are unsure. The Home Inspection Report will be a good starting point in establishing what will be needed.

Check out these blogs that are chock full of helpful information to help you review your ability to make monthly payments.

Buying Sooner

This will give you more time to build equity. We realize the emotional component of buying your first home is a major factor in your decision-making. Home equity increases are almost like icing on the cake. Because housing markets can wildly fluctuate, as they have over the past several years, look at cost trends. This will help you make sound decisions regarding timing. Remember, you need to look at the long-term benefits of building equity. Long-term investing ten to twenty years down the road should enter your investment planning. It is impossible to be sure what the home’s value will be when you decide to sell, but you will know something about how your monthly payments will impact the buildup in equity.

Look to the future

When shopping for your first home, think beyond your current needs. A typical first-time buyer tends to be younger than a second or third-time buyer. Whether you are single or have a partner, you need to plan for the future. Think about your personal goals. Consider if you want room for a family, a home office for a future business, or both. Ask yourself if the house you are looking for is expandable. You need to consider your future needs and whether the home can be updated to meet them. Our recent blog about setbacks and easements will be handy in this area.

Growing into the home is a wonderful way to develop the asset. If you are looking to incorporate a business (i.e. operate a business out of your home), you will need to verify that the local zoning and HOA will allow it. While you are checking out those facets, inquire about the future plans for the area, such as development. What project is the city contemplating that might affect you, such as roads and zoning changes? Contact the municipalities the house is located in to find out.

Work with a Realtor

You will be far ahead if you work with a real estate agent. A good Realtor can help guide you in the right direction, saving you countless hours of looking for homes in all the wrong places. A Realtor will help you confirm or even establish a realistic budget tailored to you. Their expertise will save you money in the long run. A Realtor can also help with negotiations in ways you may not think of. As always, do your homework in making this important selection.

The Pre-Approval Letter

Before shopping for a home, take the time to engage a lending company that will look at all your information and establishes an amount of the mortgage you qualify for. This smart move will help you in several ways. It will help you focus on a home price you can afford. This saves you from finding a home you love, only to be heartbroken when you find out you can’t qualify for the mortgage. With this letter, you are focused. Time savings in the closing process is huge when you have this letter in hand. Weeks can be saved.

Signing on the dotted line

Don’t commit until you are sure! Be sure your eyes are wide open. When it comes time to make that written offer, you must be committed. Second thoughts that might make you back out can be costly. Typically, when you make an offer, you will provide earnest money. You run the risk of losing those dollars should you back out.

Welcome Home

This is an exciting time. With good planning, it can be a great experience. We would love to hear about your first-time buying stories, good and bad. Drop us a line at info@rosieonthehouse.com.

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PODCAST

Buying your first home is a huge step toward solidifying your future both financially, physically and achieving your dreams. Rosie details some aspects of buying your first home and discusses points you may want to consider before you sign on the dotted line. Know what your buying and what you can afford.

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