Buying your first home can be difficult, intimidating and sometimes almost scary. Most first time home buyers need some help and assistance to guide them through the process.
The number of decisions you have to make can feel almost overwhelming. This article provides tips for first time home buyers that will make the buying experience easier.
Understanding Why you are Buying your First Home
This may seem like an obvious question to some people, but it is important to understand the reasons you have for buying your first property.
It may involve issues about wanting privacy, more space, getting married, becoming divorced, making an investment, and various other reasons. If you understand why you are buying, it makes it easier to know what you should be looking for in a first home purchase.
Understand Where you Want your First House
You should narrow down the area in which you would prefer to live based on factors such as preferred travelling time to work, public transit availability, type of neighborhood, proximity to schools, shopping, dining and entertainment, and many others.
Creating a list of these different preferences can help you to decide, and if you assign a priority to each one this will help you even more.
If you have a partner, they may also have their own personal wish list and finding a suitable compromise is important.
Know What you can Afford for a First Time Home Purchase
You must be realistic in determining how much you can provide for a down payment, monthly mortgage payments, taxes, maintenance, utilities and repairs.
From these figures you should be able to arrive at a potential purchase price for your first home. When you create this home purchase budget (a spreadsheet works great) remember to include an emergency fund of a few thousand dollars, if possible.
Like it or not, something usually surfaces that costs money to repair or replace.
When you arrive at your final figure for what you can afford to pay for a new home, you can reasonably increase that number by 20 to 25 percent when actually starting your search.
Decide on What you Need in your First Property
It is also important to carefully select what you absolutely must have in your new home. List your needs first, then follow these with nice-to-have items. On your list you will have items such as:
- Type of home (e.g. townhome, condo, bungalow, split-level)
- Number of bedrooms and their size, closet space, etc.
- Number of washrooms
- How much parking space you require
- Is a garden necessary
- Is a deck required
You will of course add other items, and after you do you should assign priorities to them and list them in that order.
Be Willing to Compromise
There are many factors that you may have to compromise on to achieve a balance between what you can afford, what you need and what you prefer as a first time home buyer.
For example, if you have some basic renovation skills then perhaps buying a home requiring some renovation could save you money.
Would you be willing to buy a house further outside of your preferred location if it had more bedrooms than a property in the heart of the area?
Start your Search
Before even considering submitting an offer to purchase, you should perform some basic searches on the Internet and actually drive around the selected area and review some homes.
Get a feel for the quality, prices, availability and any other factors that are important to you.
Go to open houses but do not overload yourself by visiting more than two or three in any given day. This is because you may remember some aspects of the home and likely forget others.
Consider also that you may be somewhat biased when you find that ideal first home. Stick to your lists and you will make a more rational decision.
Finally, you should take your time and in a buyer market for first time home purchasers, you have a distinct advantage, especially if you have done your homework, and even more so if you can obtain a pre-approved mortgage.
Hopefully, these first time home buyer tips will save you both time and money. The best of luck to you in finding that perfect first home.
I have been excited about the tax credit for the first-time home buyer and wanted to share with my readers. A few days ago, I got the document from one of my loan officer friends.
First-time home buyers have risen in market share and plan to own their homes longer than buyers in the past. The Median age of first-time buyers was 30, down from 31 in 2007, and the median income was $60,600.