Buying a house for the first time calls for making bigger decisions and taking a risk-free approach. This would probably the heftiest payment you make in a long time, until of course if you plan to purchase your second, more lavish house.
Thus, it has to be a justified and worthy investment.
Whether it’s the first time you’re purchasing a house or if it’s been long since you bought the previous home – the possibility to commit the don’ts and forget about do’s is always very high.
The task doesn’t only involve a huge amount of capital, but your comfort is also at risk. Hence, to buy a house that fits your budget and is the epitome of comfort and perfection for you and your family, it’s essential to know some basic tips.
To help you grab the best tips, hawse have enlisted the top 6 dos and don’ts for buying a house for the first time.
Let’s begin with what you shouldn’t be doing when buying a house for the first time!
Locate the House Before You Apply for Mortgage –
Most people buying a house for the first time tend to commit this mistake. They begin hunting for a location before applying for the mortgage.
Getting through your mortgage processing within no time is merely a dream. The housing inventory is heavily stacked to hold any house for a longer period of time. “You could lose on a potential property if your mortgage hasn’t been already approved.” says a loan officer at Movement Mortgage, California. “You may not get the clearer picture of your budget as well.” he further adds.
Hence, it’s better to begin your hunt only when applied for the mortgage. This would not only save you from losing that beloved house but also ease you up from the last-minute hassle.
Depend on A Single Lender Service –
Another common mistake most first-time buyer makes is to depend on a single lender service. They’re potentially spending thousands of additional dollars than required.
Considering multiple options is always a good idea.
This helps you analyze, compare, and evaluate your options based on features and rates as well as the terms of the loan. The best practice is to visit the market, connect with multiple lenders, and make an informed and evaluated decision. It can not only save you from investing in the wrong place but also inhibit future discomfort.
Buy a House Expansive Than What You Could Afford –
We understand how expansively luxurious houses make you fall in love, heads over heels.
Stretching your budget to more than what you can afford is always a bad idea.
Though the property market’s value is taking a noticeable hike, it’s important that you either stick to the budget or stretch only up to what you can afford in the long run. It’s not only about the down payment but buying a house engages a part of your monthly income too.
Thus, you have to be very cautious when it comes to making a choice. Even if you qualify for a stretched down payment to buy your dream house, you should not opt for it unless your monthly expenditure is sorted after paying installments.
Now that you know what to avoid let’s take a look at the go-to tactics to apply when you are buying a house for the first time.
Sort Your Location and Space Before You Begin the Hunt –
With so many locations and spaces available in the housing inventory, there’s a greater chance of you getting perplexed as a first-time buyer. Thus, it’s always the best practice to get your location and space sorted before you begin the hunt.
This way, you’ll have a limited number of options and priorities all set to find your perfect dream house.
Stack Up on Finances for The Mortgage Process –
Adding up to your budget – the mortgage officers often seem to charge a fee that’s not already mentioned. From the basic process of home appraising to credit checking and documentation – they can charge a decent amount for anything. Thus, it’s a great tactic to keep your finances stacked up for the mortgage process.
Even though they wouldn’t highlight, you cannot only apply for a mortgage without having to pay a single dollar.
In case you are putting an amount less than 20% of the total amount as your down payment, your lender will supposedly charge you a premium amount known as private mortgage insurance. This insurance amount is to provide your bank with a backup; if you happen to be a defaulter.
Back-Up Your Purchase Plan with An Adequate Future Plan –
As a first-time buyer, you must understand the fact that buying a house isn’t a one-time affair. You have to come up with a foolproof income plan for a lot of upcoming years.
You cannot purchase a home based on your current income status and expenses. Instead, you must devise a plan for the upcoming five years, highlighting the possibilities of incline and decline in your income, as well as expenses.
You should only finalize the purchase when you’re sure about a stable future, even more so at times like these when the entire world’s economy is facing a downfall because of the pandemic.
Buying a house for the first time is most definitely a hectic process. You have to go through a lot of difficulties and make abrupt decisions. The key is to keep a hold on your nerves and make sensible decisions.