Buying your first home is a seriously exciting milestone, but before you receive the keys and walk into your new abode, there are some things you need to consider as you go through the home buying process. In this post, we’ll talk about all of the things you need to know about buying your first home.
Are you ready to buy?
The first thing you need to think about when you’re getting ready to follow through with any financial commitment is whether or not you’re ready for it. Buying a house is a major investment, so it’s imperative that you take a hard look at your finances and life plans before you put any money toward such a substantial investment.
Here are a few indicators that you’re in a good position to buy:
- You have enough money saved up to cover the down payment
- You have a stable income
- Your credit score is good
- You can afford the mortgage payment
- You plan to stay in the area for a long period of time
- You’re able to afford any necessary home repairs right away
Is the market in your favor?
If you have any friends, family members, or colleagues that are homeowners, you’ve probably heard them talking about the buyer’s market vs. seller’s market. As a buyer, you’d want to buy when the market favors buyers; and if you’re selling your home, you would want to sell when the market is better for sellers. But how do you know whether the market is a buyer’s or seller’s market?
Here are a few signals to pay attention to.
- There are lots of homes on the market
- Home prices are lower than normal
- Homes are staying on the market longer
- There are not as many homes available on the housing market
- Home prices are higher
After you’ve taken a look at your own finances and the status of the housing market, you’ll likely have a pretty good idea of whether or not you’re ready to buy. But before you do, there are a few other considerations to make first.
Do you have adequate financing options?
Most homebuyers need some level of financial support when buying a home—especially if it’s their first time buying a home. When you’re deciding whether or not you’re ready to be a homeowner, you should look into your financing options and if you’re likely to get approved for a loan.
When searching for a home loan, it’s a good idea to consider your local options first. If you’re trying to buy a home in the Bay Area, for example, a California first-time home buyer loan might be a good place to start looking. And if you’re trying to buy a house in Salt Lake City, a search for Utah first-time home buyer loans would give you more options that suit your local area. One of the benefits of finding a local lender is that they likely have a better understanding of the housing market in your desired area, and may take the price ranges into consideration as they approve you for a home loan.
What’s your five-year plan?
Becoming a homeowner doesn’t necessarily mean that you’re tied down to your property forever, but you may not want to buy if you’re already planning on leaving the area where you buy—unless you’re flipping houses.
What are you looking for in a home?
Now here’s the fun part. Once you’ve decided that you’re ready to buy a home, you can start exploring what the market has to offer. Of course, you can do some remodeling, but you probably don’t want to go too crazy with it, because those costs can really add up. Here are some home design ideas that won’t break the bank.
When you’re searching for a home, be sure to have a list of your needs and wants so that you can better direct your search and stay within your budget. If you’re not finding homes that suit your needs, you might want to consider looking in another area, or you may decide to wait until you have more money to spare on a remodel.
Buying a home is an exciting journey, but it’s important to take time to plan and evaluate your financial situation before you do. Use this post to help you navigate the home buying process, and share your own tips with us in the comments below!