Property

Buying Home For The First Time: Here Are Some Useful Tips

2 Mins read

Buying a home for the first time can be exciting, but it can be nerve-racking too. You have to contact many people and property sellers to find the home that suits you. Don’t be an impulsive buyer! Before you buy a house for yourself and your family, there are plenty of questions that need to be answered. Meeting a few property sellers and relying on one after clearing all doubts can help ease the process.

Here are a few tips for homebuyers to tackle the home-buying process:

Buying Home

Build an Emergency Fund and Pay off All Debts

Buying a home is way more expensive than renting one. When you own a house, you are responsible for maintenance and the upkeep cost of it. And those can add up fast! So make sure you have cleared all your debts and have built an emergency fund of three to six months of expenses in place.

When you get into your home with an emergency fund and no payments besides the mortgage, you can easily pay for huge expenses that suddenly come your way. This will help you settle fast and stress-free.

Even if you have the emergency fund, be mindful of your budget when decorating and filling your house with new furniture.

Be Mindful of Your Budget

Check your monthly budget to determine how much of a house you can afford? Before you get emotionally attached to a beautiful house. Your house’s monthly housing costs should not be more than 25% of your monthly take-home pay.

You need to leave a room in your budget to compensate for your other expenses like furniture, electronic devices, and other appliances.

Save a Down Payment

Save for a down payment of 15% or more if saving to pay money for a house’s total price isn’t feasible for you. This way, you will not have to pay for private mortgage insurance.

If a down payment of 15% seems out of your reach, then you can opt for first-time homebuyer programs that offer single-digit down payments. Here are some low-to-no down payment debt options to avoid:

  • FHA Loans: You will have to pay a mortgage insurance premium for the loan’s life, including thousands of dollars.
  • Adjustable-Rate Mortgages: They ask the lender to adjust the rate to transfer the risk of increasing interest rates to you.
  • VA Loans: This type of loan allows the buyers to buy with no down payment, but you can easily owe more than your home’s market value if there is a shift in the real estate market. They charge a higher rate of interest compared to conventional loans.

Save For Closing Cost

You will need to pay for the closing cost along with the down payment. Your property seller will guide you regarding the closing cost. These fees pay for things mentioned below in the home-buying process:

  • Credit report
  • Attorney
  • Appraisal
  • Homeowner’s insurance
  • Home inspection
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About author
Spent 2001-2004 buying and selling robots in Bethesda, MD. Spent several months working with tinker toys in the UK. Won several awards for selling teddy bears on Wall Street. In 2009 I was developing strategies for sausage in Prescott, AZ. Once had a dream of supervising the production of corncob pipes for no pay. At the moment I'm creating marketing channels for magma for the government. Communicator. Beer lover. Social media advocate. Travel guru. Pop culture evangelist. Entrepreneur.
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