Have you ever made a purchase that you later regretted? Chances are, you can think of at least one. If you’re lucky, it was something small. A home is not a small purchase. In fact, it’s the largest purchase many people will make during their lifetime. When you consider the magnitude of that, it’s only natural to want to feel confident about the purchase of your first home. Buying a home is a major decision that involves not only finding the right property but also figuring out how to pay for it, and those tasks can seem overwhelming to novice buyers. Fortunately, there are several first-time homebuyer tips that you can use to smooth your path to success.
First-Time Homebuyer Tips
Buying a house that you are happy to call home works best when you know your priorities, your preferences, and your options. These first-time homebuyer tips can help you move forward with assurance.
Be Sure That You’re Ready
Owning a home is a commitment (source). Financially, you’ll have a monthly mortgage payment, routine maintenance costs, homeowners insurance, and property taxes to worry about. In addition, you’ll want to have some resources set aside for the unexpected. After all, when something breaks, there’s no landlord to deal with it. As a homeowner, repairs, replacements, and improvements are your responsibility. There’s also a personal cost to consider; being tied to a location and having the financial responsibilities that are inherent in homeownership can limit your options and reduce your opportunities. To ensure you don’t regret your choice, take some time before you buy to decide that the pleasures of homeownership outweigh the sacrifices.
The world is changing at a rapid clip, and the same is true of the housing market. The experience of buying a house today is very different from what homebuyers 20 years ago encountered. To prepare for success and avoid missteps, including those stemming from well-meaning but outdated advice, educate yourself. Business Insider suggests reviewing online education resources for homebuyers from trusted sources like Freddie Mac or taking a class that has been approved by the U.S. Department of Housing and Urban Development.
Prep Your Finances
Check that your financial house is in order before you begin shopping for real estate (source). It takes time to build strong credit and save for a down payment, closing costs, and other expenses. Start by requesting a copy of your credit report from each of the three major credit agencies. It won’t negatively impact your credit and can be done once a year at no charge. Review the reports and look for areas that could be improved. This may involve paying down credit card balances or making sure that you consistently make payments on time and in full so that any late or missed payments from your past will drop off the record.
Determine How Much House You Can Truly Afford
Before you begin touring open houses, experts recommend visiting your lender to get preapproved. Why put the loan before the house? The size of the loan for which you qualify is often a major factor in how much house you can afford to buy (source). Looking at homes that are outside of your price range is a waste of time and resources, so it’s best to know what you have to spend before you fall in love with a particular property. In addition to getting preapproved, we encourage you to run the numbers yourself. Look at your income and expenses and think about how much you can comfortably afford to pay. Evaluating your calculations in conjunction with the amount of the preapproval can paint a more accurate picture of how much house you can truly afford.
Home loan programs are not one-size-fits-all. The wide array of mortgage products available may seem intimidating at first glance, but it greatly benefits homebuyers. It provides an opportunity to select a mortgage that is ideally suited to your unique situation. At PrimeLending of Wichita, Kansas, we have options that will fit your financial needs, and we’re happy to help you zero in on the right loan for your housing goals. Contact us today to get started.