Tips for First Time Home Buyers in the Real Estate
Buying a home in real estate for the very first time can be an exciting prospect. After all, it generally signifies a large step forward in life and a sincere commitment to the community in which the home is being purchased.
With a decision as important as which home to buy, it’s crucial to consider the various angles that come along with first time homeownership. To help you out, here are the best things you should consider when purchasing a home for the very first time.
First and foremost, see the pricing range that you can afford. There are numerous mortgage calculators available online that can help you determine what your payment would likely be. Ideally, you’ll only be spending a maximum of 30% of your income on housing-related costs.
Figure out your true housing-related costs. Sure, you’ve got the mortgage all figured out if you followed tip 1, but what about taxes and insurance?
Homeowners insurance and taxes can often double the mortgage, meaning you’ll quickly be surpassing that ideal 30% mark if you’re not careful. Calling an insurance agent in the area you’d like to live is a great way of approximating the homeowner’s insurance costs you’ll be paying.
Know the closing cost! It’s important to know exactly how much you’ll be paying. Many real estate agents suggest approximating the closing cost by calculating 1.5-2% of the home price. However, closing costs can vary depending on the city, and home price. Be sure to ask your real estate agent for assistance in calculating the number!
Be prepared for rainy days. While preparing for actual rainy days is a great idea, what I really mean by this is to be prepared for any unexpected costs that may suddenly spring on you. Whether it’s an issue with the plumbing or mandatory roof repairs, random expenses are a reality of homeownership.
Make sure you’ve either set aside money just for these cases or that you’re spending less than 30% of your income on home costs. Nobody wants to end up spending half their income on their home.
Be aware of ways to reduce your financial burden. Even if you’ve decided to start a family in your new home, it’s always possible to find ways to ease the potential financial strain of homeownership.
There are a number of ways to make a bit of money off your home, whether it means renting out an extra room, having a roommate if you’re single, or even something as simple as renting out a parking spot.
It’s always important to be open to situations and opportunities that could make the cost of homeownership a bit easier on yourself.
These are just a couple of tips that could save you from numerous headaches down the line. Of course, there are a number of other tips for first-time homeowners, such as comparing home prices or tips on getting a loan, and it’s important to do your due diligence.