5 Tips to Know Before Buying Your First Home
Buying your first home is one of the biggest financial steps you’ll ever take. If you put in the time and do your research, it could be one of the best choices you’ve ever made.
To help you consider a few things you may not think about when home shopping, here are 5 Important Tips to consider before buying your first home:
Tip #1 – Can you really afford it?
Not only will you have a mortgage to pay, your payment could be much larger than your rent was. It’s common to have your property taxes, homeowners insurance, windstorm insurance and flood insurance all rolled into your mortgage.
That means if the lender told you your mortgage payment will be $1500/month, it’s likely you’ll pay $1800/month or much more, with your insurance and taxes rolled in.
Tip #2 – Have you ever kept up a yard?
When living in an apartment or house you rent, your lawn and shrubbery always looks great, without you lifting a finger. As a homeowner, you’ll have to make the time to do this yourself, which includes buying all the yard equipment you’ll need, plus fueling and maintaining them.
If you go the route of paying to have your yard maintained, you can easily add an extra $100-$300/month to pay your yard man to keep your yard looking nice. Plus a much higher water bill to keep your yard green.
Tip #3 – Will your home be new or used?
Many homeowners see buying a used home as a way to save on their mortgage. Yet many don’t think about the fact that as a homeowner, they’ll now have to pay for any repairs, upgrades or disasters out of their own pockets.
If you are buying an older home that is used, take the extra expenses that come along with it into account, when seeing if you can afford your mortgage, plus added repair expenses that can pop up at any time.
Tip #4 – Is it a buyer’s market in this area?
So what is a buyer’s market? It’s when home values have dropped below the recent median value. Buyer’s markets are a great time to buy, since the real estate economy is on a downswing.
However, if the area you’re looking at has a strong economy, and home values are higher than the recent median value, you may not find many deals. These conditions indicate a sellers market. Plus, if you buy, you may even put yourself in a position where your home may lose value in the not to distant future after you make your purchase.
Tip #5 – Is the home in a neighborhood association?
Living in a community where there is a neighborhood association can be nice. Everyone must keep their properties up to a certain standard. And home values may be on the higher side. Yet with an association comes fees and dues you must pay monthly or yearly, or risk legal action.
If your home is not in a community association, you won’t have these fees and dues to pay. Yet the neighborhood may not adhere to the same standards you are used to. Which means you could have a neighbor with an RV in the front yard, or even livestock in the back yard.
So when thinking of buying your first home, make sure you do your homework. Don’t rush into anything. The more you look around, and do your research into the area and inhabitants, the better your chances of finding a balance of a nice neighborhood, without too many association restrictions.