The Most Important Tips First-Time Homeowners Need to Know
Purchasing a house is a daunting and monotonous task. You need to deal with the real estate agent and seller. Homebuyers also need to evaluate their budget, personal preferences, and future goals before they make any decision. First-time homeowners often get irritated and tired with the process. Oftentimes, this is because they don’t know what they need to do and where they have to go.
Here we have mentioned some tips for purchasing a house that will help the first-time homeowner to make the right decision.
Fix Your Credit
Your credit score is as important in getting a mortgage as applying for a personal loan. The amount of loan and loan terms will entirely depend on your credit score. You need at least a 620 or higher credit score to get a loan with easy-to-meet loan policies. First-time homeowners with good to excellent credit scores also get lower loan interest rates.
If you have a poor credit score, you can easily fix it. Lower your credit utilization rate, pay your bills on time, and try to pay off your debts. Also, try to pay more than the minimum amount of your credit cards and loans. These tips will help you improve your credit in a few months. Consulting an expert will also help you in this case. Look for reliable and credible experts who can help you quickly improve your loan. Before establishing a good credit score, it’s best to avoid buying a house.
Hire a Real Estate Agent Carefully
A skilled and experienced real estate agent will conduct deep research on the market to find a house that meets your needs and requirements. They will perform due diligence before they give you the necessary advice. Due to their expertise, they help you negotiate and close a successful deal. Therefore, hire someone reliable and credible.
Ask your family and friends to refer an expert or preferred agent to you. Contact a couple of real estate agents, and request for references before you make a decision. Before making a final decision, ask the agent about their experience working with first-time home buyers and how they plan to help you. All these tips will help you choose an ideal real estate agent.
Analyze Pros and Cons of Getting a Loan
Are you ready to commit to a loan? Can you afford to pay monthly payments for a longer time? Asking yourself these questions is important before applying for a first-time homebuyer’s loan. The average first-time buyer mortgage loan term is 15 – 30 years. Well, the average homeownership is 16 years in the US
. So, most possibly, you might also move out in a few years. However, getting a mortgage loan is still a bigger commitment.
Only purchase a house when you are 100% sure you are ready to take all the responsibilities. Ask the following questions yourself:
- Do I have a good stable income to afford monthly expenses along with mortgage payments?
- Do I have emergency funds that can pay for three months of expenses?
- Am I ready to live in the same city, neighborhood, and house for 15 years?
If yes, then go ahead. But if you are even a little bit confused, don’t trap yourself in this fuss.
Pick the Right Neighborhood and House
Weigh the pros and cons of different neighborhoods and homes. Consider your budget, lifestyle, family preferences, and needs before you choose a house. Keep in mind that you need to look at more than just the space for your studio or patio to spend the evening.
For instance, a townhome or condominium is an affordable single-family home, but having close neighbors makes them less private. Besides that, you also need to consider the maintenance fees you might have to spend over the years. Houses will have plenty of amenities that may attract you but cost you high maintenance. So, prepare for that if you follow your heart to choosing a property.
Moreover, if you are planning to buy a fixer-upper, make a budget for the repairs and replacements. Though fixer-uppers have lower values than highly furnished and well-maintained houses, you need a handful of money to remodel and repair them. On top of that, you can’t move in immediately after you buy the house. So, even if you are getting a house in one of the safest and most demanding neighborhoods, carefully consider the renovation cost.
Stick to Your Budget
We understand you want to purchase the house of your dreams. Therefore, you might even take an emotional decision and decide to work hard to earn considerable money to support your house purchase. While in an emotional state, it makes it look possible. There is little chance you can maintain the same devotion and compassion for years.
So, create a budget- think about your salary, regular expenses, and any emergency expenses you may encounter in the coming years. Then, stick to your budget, no matter how much your agent tempts you to purchase a luxurious house. The simplest way to avoid making any mistake is to look for houses that meet your criteria and fall within budget.
Pay for Home Inspection
While it seems like an extra expenditure, it can save you in the long run. The home inspection expert will assess the structure and foundation of the property. They will check mechanical systems like HVAC to ensure everything is working appropriately. You can also ask them to check the insulation. Hence, a home inspector will save you from repairing your house soon after you move into the property.
But standard inspection doesn’t offer pest, mold, and rodent inspection. So, make sure to check what type of services you are getting in the inspection services. It’s best to hire inspectors who can check each corner of the house. Also, check their experience level to ensure they will give you professional advice.
Negotiate With Homeowner
Once you decide to purchase a house, you need to negotiate with the buyer. Your agent will help you buy your desired house at a lower price than the asked price. You need to make an offer to the seller and then wait for their response.
Don’t worry if the process takes some time, as negotiating with the seller can be tiring and long. Also, stick to the price you have decided so that the seller gets convinced at a point.
Opt for Home Insurance
Home insurance is a perfect way to protect yourself from floods, wildfire, and any natural disaster. Based on your purchased insurance, you will get coverage for the house’s structure and things in it. Each insurance offers different coverage. You need to understand the policies before you purchase them.
Also, if you live in a flood or forest fire-prone area, specifically look for insurance that offers coverage for flood or fire damage. Consider a few important things before purchasing- your budget, type of devices, furniture, and other aspects of your house.
Buying a house is one of the most emotional procedures in one’s life. We want to purchase our dream house filled with all the amenities we wish for. Of course, this is not possible. You need to be realistic while purchasing a house. Think about your family and your future. Also, consider your retirement plans to know whether you can afford a property or not. For that, you can consult an expert like Personal Capital
. And lastly, don’t forget to evaluate your budget.