Preparing to buy your first home? Congratulations! Between equity, appreciation, and the sheer stability and freedom that come with buying a home, it’s a wise investment. Of course, buying a home for the first time doesn’t come without its challenges. Getting ready to purchase your first-ever home is about as easy as making crème brûlée without a cookbook. There are many moving parts, and misstepping on such a large decision can have serious consequences. To make your hunt easier, check out our top tips for first-time homebuyers.
Tips for First-Time Homebuyers
Put Your Finances First.
When you’re ready to apply for a mortgage, review your finances. Start by checking your credit score and getting the necessary documents in order, so that they’re ready for review (source). Loan officers and mortgage lenders typically ask to see pay stubs, bank statements, and recent tax documents. To determine what you can afford, check out our handy mortgage calculator online. One rule of thumb is that you should be able to afford a mortgage three times your household income (source). To ensure you can afford your new house, consider meeting with a financial advisor for expert advice.
Think of Your Long-Term Happiness.
Your long-term happiness in your new home is just as important as how you choose to finance it. After all, any deal you strike — good or bad — can become a burden if you spend your days wishing you lived somewhere else. So as you shop for homes, think of your long-term happiness (source). Although your location may not change two, five, or even ten years down the line, your life could change drastically. Will you have children? Will you change careers? Will you be taking care of any elderly relatives? Do you want a pet (or more pets)? Consider these questions as you browse real estate listings. Your answers may influence your decision.
Be Hasty, but Avoid Restlessness.
Once you have your finances and documentation in order, and you’ve been pre-approved for a mortgage, it’s time to act. The housing market moves quickly, so you’ll need to act fast as well. As HGTV says, “Real estate never sleeps” (source). If you have your eye on an attractive property, make decisions as quickly as you can — or else someone else will beat you to it. Especially in competitive areas, you can’t afford to dawdle. Keeping that in mind, remember that you should never make an offer on a house if you’re not 100% sure about it. In addition, make sure that your contract includes important contingencies, like a house inspection (in case the home has any hidden issues) and a financing contingency (in case your loan is not approved). Do your due diligence, and if you’re not comfortable with any aspect of the purchase, walk away (source). You can always find another house.
Consider Your Next Chapter.
Most of the time, your first home will not be your “forever home.” Even if you want to stay in this house forever, your circumstances may change. For this reason, we encourage you to keep property resale values in mind when shopping for your first home. Although it may feel strange to think about selling when you haven’t even bought your first home, this proactive step will help in the long run. Consider the neighborhood and nearby schools even if you don’t plan to have any children. If your home resides in a bad school district or on a busy street, you’ll have a smaller pool of potential buyers when you choose to sell the house (source). In addition, note that some houses have a cap placed on them, meaning the property’s resale value can’t go past a certain price even if you renovate and improve the house (source). If you’re aiming for a certain resale price, check on this before buying the home.
Although buying your first home may not be a piece of cake, it can be an extremely interesting and rewarding process. Take a deep breath, and follow our tips for first-time homebuyers. Once your finances are in order, you know what you’re looking for, and you’ve been pre-approved for a mortgage, you can begin shopping for your dream house.
Hungry for even more tips for first-time homebuyers? If you live in the Kansas City area, contact PrimeLending today. Our team is committed to helping you navigate the home hunting process so that you can purchase the home of your dreams. At our branches located throughout Kansas City, we can help you explore our wide variety of loan products and programs. Plus, PrimeLending utilizes delegated underwriting, local appraisers, and cutting-edge technology to accelerate the underwriting and closing processes. We’re more than happy to navigate you through the process of buying your first home. When you’re ready to learn more, please give us a call at 844-701-5626.