If you’re a first time home buyer, it’s an exciting time to be looking for a home. Here are a few tips to consider as you are searching for your first home.
1. Take a look on a few home buying websites and see what homes are selling for in your area. Check out homes similar to the size you are interested in with comparable features. This will give you an idea of what you should be paying. You can also do a search of available MLS listings in your area, too.
2. Calculate what you can afford. There are a number of online calculators which will provide you an idea of what you can afford to spend and what your payment will be. You can also calculate expenses such as insurance and utilities. To get an accurate estimate on insurance costs, you may have to call an insurance agent. You won’t be obligated to purchase the insurance, but it will provide you with a good idea of what insurance will cost you on a home of similar size in your area.
3. Find out how much closing costs will probably be. These will include the origination fees which will be charged by your lender, settlement and title fees and taxes. Homeowner’s association fees and homeowners insurance or other prepaid items would be included as well.
4. Scrub your budget and see just how a house and all the associated expenses will fit into it. Housing costs should be no more than 28% of the monthly income. Homeowners can become house poor when their housing costs are more than 30% of their monthly income.
5. Talk with a couple of good real estate agents in your area about their opinion of the housing market. What is their feel about prices? Will they continue to decline or have they hit bottom and started rising?
6. Another question for a real estate agent is if there are other areas she or he might recommend that you may not have considered. It is always a good idea to keep your options open. There may be an area just outside your prime area of consideration that would be just perfect if you’re willing to drive just ten more minutes and the homes are selling for $10,000 to $15,000 less.
7. Consider the overall picture. Buying a home is certainly a good investment, but only if you can afford to keep it maintained in good condition. Maintaining a home is not only costly, but is also labor-intensive. There will be expenses for new appliances, plumbing repairs, and even the possibility of a new roof. These types of expenses can quickly drain a bank account if you aren’t prepared for them. There is also the continuing time it takes to care for the lawn and the landscaping and the housework. These are all the necessary tasks of home ownership.
Owning your first home can be exciting and scary at the same time. There are many responsibilities involved and many things to consider. However, if you do your research and take your time to carefully consider all risks and ensure you can afford all the costs involved with owning a home, it will be well worth it.