Everyone ends up working towards buying a home. It’s a rite of passage and a major sign of adulthood and independence. As natural as it is, however, buying your first home is an inherently stressful and difficult process. It’s easy to see why so many people feel that way.
You’ll be expected to put down a significant amount of money for it, and getting to where you can afford it often feels like an uphill battle.
There’ll eventually come a point where you get there, though. When you do, it doesn’t mean you should just dive into it. Instead, it’s worth knowing as much as possible about the process ahead of time. That way, you can be as prepared as possible for this major life decision.
There’s quite a bit to know, so dive into some of the more important areas.
Buying Your First Home: What You Need to Know
1. Make Sure You’re Ready
The first step anyone should take before buying their first home is to make sure they’re actually ready. You’ll be making a major commitment, affecting you for years. The finances alone make this a priority, considering how much you’ll spend on the property.
That’s especially true when you’re buying it with a partner. Make sure you’re in the right position to start looking for a home and actually buy one. Take your overall needs and lifestyle into account, as well as how buying a house will affect these going forward.
2. Decide Between New Vs. Old
One of the main decisions you’ll have to make when you’re buying a home is whether you want to go for an older property or new construction homes. Both offer pros and cons, making it worth taking the time to figure out which one’s best for you going forward.
Newer homes tend to cost more than older ones, but they’ll have much fewer issues. Take the time to decide which one’s right for you and your needs before moving forward with your house hunt.
3. Have a Firm Budget
You’ll naturally need a budget when house hunting, so set it as early as possible and stay firm. A clear upper limit you can’t go past is recommended, as it helps make sure you don’t overspend.
Don’t just keep the upfront cost in mind when you’re doing this. For example, you’ll need to consider the monthly repayments on the mortgage after buying. It affects your finances and overall lifestyle for years to come, making it a priority to focus on.
4. Don’t Overlook the Community
When most people look for a house, they focus on the property itself. While this is important, remember that the house doesn’t exist in isolation. It’ll be a part of a neighborhood and overall community, and it’s worth keeping that in mind.
Once you’ve found a home you like, take the time to tour the community and see if you like it. The amenities, locals, and multiple other factors will all play a role. Touring on different days of the week helps give you an accurate idea of what it’ll be like living there.
5. Shop Around for Financing
When you’re getting a mortgage for your home, you might think you’ll have to stick with whichever institution you’ve been with already. While you’ll already have a relationship with them, that doesn’t mean they’re your only option. Quite the opposite because you’ll likely have more than a few others.
You could be much better off shopping around for your mortgage before choosing. It could help you get a much better deal later on. Focusing on the interest rates with this is recommended. Even a difference of 1% or 2% could help you save thousands in repayments.
6. Work With a Real Estate Agent
Finding and buying a house by yourself means putting significant time and effort into it. The easiest way around this is to hire a real estate agent to help with the process. They take on much of the time and effort for you.
They’ll find out exactly what kind of property you want to buy and find suitable options for you. After that, they can arrange viewings, negotiate with buyers for you, and more. They could be more than worth the extra cost of buying a house.
7. Be Aware of Closing Costs
Everyone knows buying a house costs a lot of money. Focusing on the listing prices of the properties is deceiving, though. It isn’t the only cost you’ll need to be aware of going forward. You’ll also need to know about closing costs.
These are the fees associated with finishing up the purchase of the property. They could end up being higher than you’d think, and you’ll need to pay them. Make sure you’re prepared for them so you don’t end up scrambling to get them together later on.
How Much Does Buying Your First Home Cost?
Speaking of closing costs, it’s worth figuring out how much buying your first home actually costs. It could end up being noticeably more than you might’ve thought. The property listing price is often just the tip of the iceberg, with extra fees later tacked on. Unfortunately, putting an exact figure on this could be difficult. There’s no one-size-fits-all answer to it.
Most of the extra costs impact how much you’ll pay for the house. Many fees are charged as a percentage of the sale price, so they could cost you thousands by the time you’re done.
In general, it’s worth adding between 10% and 15% on top of the offer you’ve put in. It should help you cover all the extra expenses when closing on the home.
Tips for Buying Your First Home
Buying your first home seems more straightforward once you know which steps you need to take. That doesn’t mean it’s just a matter of going step-by-step. It can still be relatively complicated when you’re doing it that way. That’s where a few home-buying tips come in.
These can help to simplify the process more than you’d think, with some steps helping more than others. Some of the more useful of these include:
- Understand Your Mortgage Options – A mortgage is a notable part of buying a home, but you might not realize you have several options. Each option has pros and cons, and it’s worth understanding them to get the best one for you.
- Explore Buyer Assistance Programs – There are plenty of buyer assistance programs out there that can help you buy your home. It’s worth looking into these to see if you’re eligible. They could help with your deposit, making the initial purchase much more affordable.
- Know Needs Vs. Nice-to-Haves – You’ll have a dream home in mind, but it’s always worth being realistic with this. Separate what you want into your non-negotiable needs and nice-to-haves, or optional extras. It helps make sure you find a house that meets your needs.
- Don’t Skip Inspections – Once you’ve found a house you want to put an offer into, don’t skip a property inspection. It helps you find out the exact state of the property before you buy. This information could end up being vital for your purchase.
Adding these to the steps above makes buying your first home much simpler. At a minimum, they should help to make the process much more manageable.
Wrapping Up
Everyone dreams of owning their own home. It’s easy to see why. It’s seen as a rite of passage and a major sign of independence and adulthood. Despite that, getting there can feel like an uphill battle at the best of times. Thankfully, it doesn’t need to be nearly that complicated.
By knowing as much as possible ahead of time, you’ll have much less to worry about. You’ll end up in a position where buying your first home is much more manageable.
Knowledge is power because there’s so much to know about buying a house. While it seems overwhelming, it could be much more manageable than you would’ve thought with some time and effort. There’s no reason you can’t get there.
