I just purchased my first home. It was an experience unlike any other I have ever attempted.
It was with helpful online articles (and with the wisdom of my real estate agent) that I was able to have a stress free and enjoyable experience.
There are numerous curve balls that might come your way when buying your first home; however, many of them are avoidable.
Financial Ducks in a Row
First and foremost, run a free credit report to ensure that you don’t have any delinquent or derogatory marks on your credit.
One of the most dangerous pitfalls to buying a home is attempting to hurdle last minute hiccups with loan approvals.
Once you determine that your credit history is in order, visit any of the numerous mortgage calculators online to see what you can afford.
Zillow has a great Mortgage Calculator that is easy to use. The general rule of thumb is that your monthly payments should not be more than 25% of what you earn monthly.
The last major step is pre-approval. After deciding what you can reasonably afford, choose a lender and apply for pre-approval. They will ask you to provide them credit information and proof of income.
Once you have a pre-approval letter in your hand, a seller is more likely to play ball with you, in regards to negotiation price and contract stipulations.
Location, Location, Location
Whether you want to decide on a neighborhood or a house in general, websites like ibuynew provide tools necessary to find homes within your price range and other specifications (such as house size, bedrooms, bathrooms, etc).
Once you figure out the general area in which you desire to live, contact your real estate agent and let them know the specifications you are looking for, and they can provide you with instant updates about houses on the market and houses entering the market.
Inspecting the Goods
It is always wise to hire an inspector. A home inspector has massive amounts of knowledge, ranging from electrical to plumbing, and roofing to foundation work.
A good home inspector will keep you from buying a house with major problems. A great home inspector will find every problem — ever so slight. Knowing what problems the house may have is essential in deciding on a fair price.
Surveying the Land
Without a survey, there is no way of knowing whether or not there may be conflicts with neighbors. The last thing you want to have happen is to move in, just to find that your neighbour has a shed or workshop built on your land.
Additionally, a survey is a must for those looking to building fences or disputes a neighbour’s placement of a fence.
Assessment of the Home
Assessments are required by the bank to ensure that they aren’t writing a check worth thousands more than the house is actually worth. The bank will not give you a loan for $200,000 if the house in question is only worth $150,000. It protects them (and at the same time protects you from getting ripped off!).
While this might all seem confusing, a real estate agent does this for a living and can recommend reputable inspectors, assessors, and mortgage lenders. Your best bet for purchasing your first home is to use a highly recommended real estate agent.
They will act as your guardrails on the symbolic highway to purchasing a new home.