Buying your first home is an enormous investment, and a very big stepping point towards life changes. In truth, most home buyers even realize how much changes when you purchase your first home. Because of this importance, every step towards your first home purchase should be taken carefully and wisely. Nonetheless, there are huge benefits towards owning a home, rather than renting, such as your capital actually going into something that you own, rather than disappearing over the course of your lease rental. Here are some important things to know about buying your first house…
Be ready to commit to a home
As stated above, buying a home is a huge responsibility, and certainly not one that you want to take lightly. For this reason, it is very important to actually know that you are ready to commit to purchasing a new home. In terms of cost, owning a home can be quite a financial strain, initially, although may pay off as a long-term investment. Do your research about the different types of costs that might sneak up on you, as a homeowner, such as property taxes, insurance, or HOA fees, not to mention the costs of maintaining your home that you have to put forward, yourself.
Opt to have a larger down payment
Although it might be tempting to move forward on purchasing a home before you have a substantial down payment (if you are even able to do this), it is a move that will end up costing you, in the long run. Purchasing a home becomes a much wiser financial investment if you take the time to build up a sizeable down payment. Not only will this mean paying less interest and lower monthly payments, over time, but it also gives you more leverage as a buyer to get a better deal on a home. Although the larger the down payment, the better, a good target to aim for is to save up at least 20% of the home’s value.
A location can be as important as the home
As a general rule of thumb, when looking for real estate, there is a balance between a nicer location and the amount of space available to purchase. A $200,000 home could be a sprawling 3-story home in the middle of nowhere, but only a tiny rambler in an area that is highly desirable. The right option here is largely based on your own personal preference. Some people simply want the most house for their dollar, while others might want to be closer to a cultural center, where there is likely more work opportunities.
Continued in Part 2