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Essential Advice for First-Time Homebuyers

May 27, 2020

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Buying your first home is the American dream. You’ve been working hard and saving up so that you can stop paying rent and move into your home. For some, the process can be daunting and confusing. If you’re one of those people, use the following tips to help you make the best decisions.

Check Your Savings

Before you think about buying a home, look at your finances. How much money do you have in your savings account? Is it enough to purchase your dream house or will you need additional financing? How much can you afford to pay as a down payment for a mortgage? Most lenders can fund up to 90% of the home’s purchase price. You should also know how much you can afford you to repay every month after subtracting expenses. Apply for a loan preapproval before you begin the house search.

Understand the Housing Market

If your job allows you to work remotely, you can buy your dream house in a different state at a more affordable price. However, you should understand the different housing markets before you make an offer for that house. For example, buying real estate in Montecito, California will be different from buying real estate in Columbus, Ohio. That’s because the laws and property values are not the same. What’s permitted in one state may be prohibited in another, meanwhile what one sum of money can get you in one state will get you something else in another. Find a local agent to help you with the purchase. Agents that know the area well can help you understand the neighbourhood and local laws.

Identify Your Needs and Compromises

You should know what matters to you the most. Do you want a big house with a nice backyard? Do you want a home with a large living room or kitchen? The reason why you need to decide on what you can’t do without is that you won’t find the perfect home. There’ll always be a feature that doesn’t sit well with you. Sit down and write a list of everything that you want in your dream home. In the list, you should also write the things that you’re willing to compromise.

Don’t Overspend

When you start going to open houses, you’ll see a lot of beautiful houses. The most appealing homes will be highly-priced. If you can negotiate the price, don’t let that chance slip. Inspect the house and look at any repairs that the house might need. Ask the seller to pay for the repairs before you close the sale. If you’re going to spend more money on home improvements, let the seller know so that they can reduce the price. Never spend more than you can afford on a house. Use your list to look at compromises and buy a house that has the most important necessities – it’s likely to be within your budget range.

Ask Questions

Make sure that you ask lots of questions during the open house. Know when the house was built. How many people lived there before it was put up on sale? Were there any renovations done on the house in the past? What about the roofing, when was it last replaced? Find out more about the home’s wiring and plumbing. Some systems are outdated, and you may have to spend a fortune to replace them after you move in.

Finally, know about the closing costs because they can surprise you. Buy a home that’s slightly less than your budget so that you can have money left over for emergency expenses. Since you don’t know where life will take you, consider the resale value of the house before you buy it. Will it appeal to home buyers 10 or 30 years from now?

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