Buying a home is probably the single biggest investment decision most people will ever make. In choosing the perfect home, there are so many factors to consider, like price, location or whether to buy new or resale. As a first-time home buyer, going through the process can be challenging and very overwhelming.
To help you with your first-time buyer’s journey, we’ve compiled 5 key tips to get you started on the right track.
Start Saving for a Mortgage Early
Saving money requires work! This is especially the case when saving for something important and hefty like a home. Saving for a home is going to take time, so start saving as early as you can.
Also, start by identifying real priorities and which areas of your life you can cut back on expenses. For example, do you eat out all the time or shop for the newest and latest gadgets all too often? Cutting back on extra spending can help you start to build your nest egg.
The best way to analyze and make decisions about saving is by making a budget with your ultimate goal in mind – buying your own home!
A key point to keep in mind is that the higher your down payment is for a mortgage, the lower the monthly payment will be. And don’t forget – you’ll need to save more than just enough for a down payment because of additional expenses including mortgage fees, taxes, insurance and other related costs.
Determine How Much You Can Afford
Of course, before you even start looking for a home, you’ll need to determine what you can afford. As a first-time home buyer, you need to have a full picture of what your financial obligation will be.
Many home-buyers look at homes that cost what their maximum pre-approval amount is, and that’s not a wise thing to do. Just because you are qualified for a certain amount, that doesn’t mean that you can or should afford a home for that particular amount.
You need to look at ALL of your monthly expenses when assessing how big of a mortgage you can truly afford.
Hire The Right Agent
For first-time buyers, so much is unfamiliar and it will probably feel like you’re trekking through uncharted territory. Choose someone who is knowledgable, experienced and who understands the true value of a property and whether or not the selling price reflects this. Remember that agents have access to listings before anyone else so it’s essential to choose a real estate agent who will have your best interests in mind and understands exactly what you’re looking for.
Stick to Your Budget
Once you’ve determined what you can afford (remember pre-approval amount is your ceiling), you need to stick to a budget. This can be hard when you find a home you love. It’s tempting to make a high-priced offer you may think is sure to win, but in the end, you may be putting yourself in a strained financial situation.
Don’t let your emotions take over. Stick to your budget to avoid a mortgage payment you can’t afford.
Don’t forget – monthly expenses are not just your standard, planned monthly costs like mortgage, phone, and utilities. You’ll also want to account for other expenses that are unplanned, like a broken dishwasher for example.
Pick The Right Home For You
This is probably the most enjoyable stage of home-buying: List everything that you need or want in your new home. Make sure the list is in order of importance. Usually, the top of the list should contain the more important needs like neighbourhood amenities, commute time to work, quantity and size of rooms, etc.
Then work your way down the list and be realistic about what your real priorities are versus the things that are just nice little extras. Remember to always research the neighbourhood and look at crime and overall safety statistics, noise levels, traffic and where the closest amenities are.
Buying a home for the first time can be a real test of emotions and patience. It’s a roller coaster of feelings that can be scary but also fun, so make sure you have the right professional who will help you along for the ride.
If you’re a first-time home buyer, contact us at Rego Realty and we can help you with your new and exciting journey!