We’ve talked a lot on this blog in the past about the FAQs of First Time Homebuying – but usually we’re talking about that, we’re talking about the part of the process that involves other people, like applying for a mortgage or which myths aren’t worth listening to. However, something we haven’t talked much about is what you should do on your own with your partner, before you set out on buying a home for the first time.
So, if you and your new spouse – or your spouse-for-a-while, or whatever your situation may be – have decided that it’s high time you stopped renting and committed to buying a home, here are some tips on how to start that conversation with one another, and what to plan for, from financial lending analyst David Jackson.
I hope this helps you to get your planning started! Once you’ve got these details worked out – or even before, if you need advice, along the way – reach out and give me a call or send an email, and I’ll be happy to help you with the next steps in the process of buying a home together for the first time!
Newly wedded couples are always eager to buy a home and start their new lives together. While buying a home may seem like a smooth ride, it comes with numerous challenges, and requires preparation. If you have already exchanged your vows, and you are house-hunting for an excellent place to start your lives together, read through these tips to get fully informed.
Financial Planning
Primarily, you have to ensure that you operate on a budget and you have a sizeable down payment to place on your new home. Use the following tips when drafting your financial plan.
Have a good credit score
Generally, the credit scores you need to get an approved loan for buying a home is relatively low. However, if you want to get a better place, you will have to get a higher score than average. Therefore, you must start working on that score early sufficient, because it could take you months. In a nutshell, what you have to do is make your payments on time and lower debt utilization ratio.
Pay off your debts
Paying off your outstanding debts boosts your credit score. It also makes you a desirable client in front of lenders. When buying a home and applying for a mortgage, the lender looks at your debt against your monthly payments, and if the percentage is too high, you cannot qualify.
Save up and budget effectively
Ensure that you have some money saved up for your new home so that you cover most of the expenses without going deeper into debt. Also, ensure that you budget well and you have a considerable down payment for your new home.
Home Buying Tips
In this trying time, you may be tempted to make an impulsive purchase just to get the process done with, which may have deadly repercussions to your finances. Therefore, we have outlined tips for buying a house that will help you make your new home a blessing and not a burden.
Find a home within your price range
Buying a home should not strain you too much financially. Therefore, ensure that you use the services of the appropriate real estate agent that will help you find good houses within your budget for you to choose.
Research for the best neighborhoods
After you have found good houses within your price range, avoid making your decision of buying a home based on the property alone. Ensure that you factor in the neighborhood aspect in making your decision about which house to pick.
(Pro Tip from Mary Byrnes: You can use my school district boundary map to help with this! You can also call me if you’re not sure what neighborhood best meets your needs – I know tons about the area and I can help you find the town that’s the perfect fit for you!)
Attend open houses
After figuring out the houses with good neighborhoods, be sure to attend their open houses. It will allow you to get the best home from the list compiled by your real estate agent.
Make a competitive offer
When you find a house that is within your budget, you should make a competitive offer. Your real estate agent will guide you adequately without making an impulsive offer to knock your competition out. If the house is in a highly competitive bid, a personalized letter may help your offer stand out.
Prepare for an official closing
Once the seller accepts your offer, the closing process will begin immediately. Keep the process smooth by ensuring you know what to expect. Ensure you have the right documents, and confirm with your real estate agent for any further clarifications.
Home Buying Mistakes to Avoid
If this is your first time buying a home, there are many mistakes you could make. Here are some tips to guide you through:
Not operating on a budget
Without knowing how much you can afford, you might just be wasting time. You might end up looking at houses you cannot afford, or going for events of homes that are above your budget. To avoid making this mistake, use a mortgage affordability calculator, to help you know what is affordable for you.
Not being on first time home buyer programs
Many programs for new homeowners offer low down payment loans. Ask a mortgage lender about your first-time buyer options, and also programs in your state. Avoid concluding that you cannot buy a house because you do not have sufficient money.
Emptying savings
When buying a previously owned home, it will need some small repairs. Ensure that you budget sufficiently to set aside some money for repairs and other things your new home might need. Don’t empty all your savings on the purchase of the house alone.
Weatherization and repairs
When buying a home it is important to ask questions about the weatherization of a home: For example, is the home properly insulated? If the home is not properly insulated it can cause your utility bills to soar. This is why it’s so important to make sure you have an inspection done before you buy.
