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Buying a your first home can be a very stressful experience. During the home buying experience you will encounter many different emotions while shopping for your new home, securing a home loan and moving to your new home. Most Homeowners do very little research before they buy their first home. In order to eliminate undue stress and make the process a memorable and enjoyable event you may want to take the following tips into consideration.
Do not, and I repeat DO NOT, buy too much home and stretch your budget too
thin. This is becomingly increasingly common in homebuyers and with all of
the crazy programs that have become available over the past decade or so. Figure
out a monthly budget before you do anything else, before talking with a Realtor,
before talking with a loan officer or mortgage broker, and before you even begin
looking at homes. This way you will know exactly what your comfort zone is for a
monthly mortgage payment immediately before you get started looking at homes and
fall in love with homes that would stretch your budget too thin. This is the
number one reason that people fall behind on their mortgages right now. Just
because you are pre-approved for a certain amount of a mortgage does not mean
that you have to obtain a mortgage for that full amount. If homes are too pricey
in your area, either consider moving or look into town homes or condos. There
are some advantages to condos and town homes versus single family residential
homes. Remember you will most likely have to make this mortgage payment for the
next 30 years. Make sure you calculate your budget and take into consideration
your current lifestyle, savings, investments, vacations, etc... This way you
will still be able to make sure that you are able to enjoy what you and/or your
family enjoy without having to make unnecessary sacrifices just so that you can
own your own home.
Always talk to a trusted mortgage professional about how much home you can afford. Getting pre-approved for a mortgage loan not only lets you how much you can afford, it lets the seller know that you are a serious and qualified buyer. Many experts believe buyers should try to determine the future value of home when deciding whether to buy a home. The question buyers should ask themselves is " If I had to sell this home quickly will I be able to sell without losing money?". A new home buyer mistake that many people make is buying a home that they cannot afford. Affordability should be a primary concern that
supersedes the size or amenities of a home. When you are buying your first home make sure you consider what functions you need your home to have for yourself and/or your family. If you or a family member are disabled, it may not be a good decision to buy a home without a first floor bedroom. If you have a family with 4 girls, buying a home with only 1 bathroom may not be a good idea either. If you have 5 children, you and your spouse, buying a 1-2 bedroom home will probably not work out too well either. Therefore, before you even begin looking at homes you should sit down with your family and think about what functions you "need" to get from your home. How many bedrooms, how many bathrooms, do you need a large yard, do you need a certain sized garage, does the house need to be handicap accessible, do you need a ranch or will a 2 story or split level home work, do you need to be in a good school district, how far away will work be, etc.... These are all good questions and factors to consider before buying a home. Many consumers, especially first time home buyers, do not consider what they need from their home before they buy one and end up settling for a home with things they don't need instead of the absolute necessities that they do need. Therefore, know what you need ahead of time and make those items required in a home you buy. This may require some patience, however you will be much happier in the long run. When you are chatting with your mortgage professional, make sure they have your best interests in mind. Make sure your payments are going to allow you to eat more than Raman noodles for the next 30 years. Also, make sure that your Realtor understands that you have only been approved for a certain level. If your Realtor is showing you homes you are not qualified for, then set them on the correct course. Remember YOU are the best person to determine how much home you can afford. It is YOUR responsibility. A common mistake first-time buyers make is failing to consider their future needs. Not only should you determine if the house has an adequate number of bedrooms and bathrooms for your family now, you should also consider whether or not it will be able to meet your family's needs in the future. You should be sure to get a home inspection. Additionally, you should make sure the home inspector comes highly recommended by a disinterested party. Ask family, friends and co-workers if they have experience with a home inspector they can recommend. A home inspection should not be a quick affair. The longer the inspector takes to inspect the house, the better. When buying your first home you should make a list of needs and wants in order to narrow down your search. Once you own your home it will be the first time you will be completely responsible for all repairs, both major and minor. Keeping the wants to a minimum and concentrating on the needs will ease the transition into home ownership. You should always keep in mind that this is your first home, or starter home and you can always upgrade later. There's more to owning a home than just simply paying your mortgage payment, property taxes and homeowners insurance. A huge mistake that many first time homebuyers make is not taking their normal living expenses into consideration. You will still have to pay for groceries and will still need spending money. In addition if you weren't paying for utilities while you were renting this is a new expense that you would incur as a homeowner. Some people are convinced that foreclosure properties are always great investments. The fact is, these homes are often neglected and the cost to repair years of deferred
maintenance can make an investment sour quickly. Be cautious when buying homes that are "distressed sales" and make sure you heed the advice of an licensed, experienced, and trustworthy home inspector. A common mistake would be to buy the home "as is". This basically tells the seller that you will buy this home no matter what the home inspection or termite reports report back, even if it comes back negative.
Some homeowners are un-aware of the property taxes and insurance that come along with owning a home. If you're paying only principal and interest on your monthly payment, you will have to pay your taxes and insurance in full or in installments at the end of each year. It is easier to set up an escrow account with your lender and pay your taxes/insurance monthly.
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Information listed above is to be used for educational purposes only and is not guaranteed
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