If you are considering the idea of buying your first house, you’re in the right place. First time buyers may be facing so many daunting tasks. They may be asking a lot of questions.
This guide will provide you with the 10 things you’ll want to consider before you purchase a home for the first time. Let’s dive right in and discuss the following things that you’ll want to mull over before you sign on the dotted line.
Find a realtor you can trust
Finding a trusted realtor should be one of the first priorities on your list. If you are unsure of who to go to, you should try Teifke Real Estate as your best option. You want someone that will work with buyers like you in finding the home of your dreams.
It’s important that this realtor is someone who will have your best interests at heart. Yes, they’ll earn a commission after the sale. However, some of them may be obsessed with that and just forget about your needs and preferences.
Remember that a contract is involved
Yes, paperwork is involved during a housing deal. This includes the papers you will need to sign to finalize the sale. You’ll want to take a look at the terms before you even pick up the pen.
At this point, you may have an idea for a counteroffer that is different from the original. Negotiation matters when it comes to making a deal. The same can be said for buying a house.
For example, you can negotiate for time regarding an inspection. Or waiving certain screenings such as radon. This may depend on your personal needs at the time.
Be logical in your buying decision
Everyone buys based on emotions. This happens all the time. When it comes to buying a house, there’s a lot of thinking that needs to go into this.
Look, we get it. You love the look of it, the amount of room it has, and everything else. But you’ll want to think about whether or not purchasing the house is a good idea.
Buyer’s remorse is a real thing. It can happen for many reasons. Could it be due to the high upkeep costs or the commute being too long?
Also, think about where you are in life. Are you married with kids? Are you not at that stage yet?
It’s important to think long-term here. Because you’ll never know if and when that space will be enough in the next five to ten years.
Purchase a house that you can afford
The home price and the price a mortgage company believes you can afford are two different things. So it may be a good idea to think about a real number.
How much are you willing to afford for a mortgage? How much is too much? You’ll want to find that desired price point.
To do this, you’ll want to take a look at your gross income. Paying anywhere from 28 to 33 percent (one-third) should be your best range. For example, if your gross income is $75000 a year, your estimated mortgage payments per month will range from $1700 to $2100.
Don’t forget that other factors apply include interest, insurance, taxes, and more. You’ll want to talk to a mortgage broker if you need a complete explanation of how it all works.
Think about what you could fix up
While it may not be a necessary task, you may be purchasing a place that may need a bit of touching up. Some houses may have cosmetic issues that won’t take too much money to fix. Maybe you have ideas of decorating it and redoing the place yourself.
Either way, it’s up to you. You may have a DIY task on your hands right after you buy the house. Most of the time, this may not be necessary since the sellers may have already given the place a facelift.
Consider your other commitments
Are you married? If you are, this may determine how your assets are handled at the time when you are purchasing the house. The same can be said in the event of a divorce.
If you are not married, there are rules and laws in your state that will not apply to assets tied to your mortgage. So you’ll want to think long term here. If you or your partner are not married yet, you’ll want to consider an exit plan if things aren’t going in the right direction.
By this, we mean in case the home you’re both purchasing and moving into isn’t the right fit as you thought. Talk to a lawyer about having an agreement in place regarding mortgage payments, titling, and other things that could happen if buyer’s remorse somehow makes its way to you.
What other debts do you have?
It’s important to consider your other debts. This includes student loan debt. This may be something that might affect you as a first-time homebuyer. Back then, buyers with more than 12 months of loans deferred could be able to purchase a house and discount the debt.
If your loan is in deferment, be sure to get into an income-based repayment plan while you still can.
Don’t fall deep in love with the mortgage interest deduction
Yes, taxpayers will get bonuses and deductions during tax season. One of them is the mortgage interest deduction. This can be deductible if you choose to itemize using the Schedule A form.
At least ⅓ of taxpayers will claim this. The rates may change, so it’s important to know what they are before you are able to itemize this on your taxes.
Look beyond the purchase price
It may be within your budget range in a sweet spot. Or maybe on the higher end. Either way, it may be a good idea to look beyond the price and see what makes the house special.
Maybe there are special features like a pool, patio, or something different. Whatever it may be, see if it’s something that may just be worth having around when you buy the place.
Don’t feel obligated to buy right now
You shouldn’t pressure yourself to make a decision. Nor should you rush into buying a house sooner rather than later. Again, this is a task that will take time.
Yes, you might be tempted to grab a house on a good deal. But it’s never too early or too late to make a decision. Buy on your own time, not someone else’s.