A house is the biggest investment that most people will ever make. The decision to buy should not be taken lightly. Any time you buy a house it can be stressful, but buying one for the first time can be daunting. Here are a few tips to make your first-home purchase go more smoothly.
1: Determine your housing budget - Making sure that you can afford a house is the first step in the process. Fannie Mae recommends that buyers spend no more than 28 percent of their income on housing costs. Don't forget to add mortgage insurance, property taxes and homeowner's association fees. Use a mortgage calculator to determine what the approximate costs will be. Make sure to ask your real estate professional about taxes and fees.
2: Know your needs before you start looking - This requires a little self-analysis and planning. Think about what's important to you and your lifestyle. It's not really that difficult to determine whether you want to live in the country, suburbs or in the city. But if you don't want to be bothered with lawn and home maintenance, opt for a condo. If you're planning a family, you probably want a house with a lot of living space. Take a look at your employment situation, too. If there's a possibility of being transferred, you'll want to buy something that is likely to sell quickly.
3: Understand the additional costs of owning a home -There's more to consider than just a monthly mortgage payment. Your budget needs to include insurance, utilities, repairs, maintenance, lawn and landscaping.
4: Read the fine print -Everything is important in a contract, so read all the clauses and fine print before committing to a mortgage. Rates can vary greatly depending upon where you go and what programs are available, so don't be afraid to shop around for the best rate. The rate in the mortgage lender’s ad isn't always what you'll pay; lenders add points, private mortgage insurance and closing costs, which add to the cost of the mortgage. It never hurts to have a lawyer look at any contract.
5: Ask for full disclosure and a home inspection -Investing in a home inspection can save you money and stress in the long run.
While most states require the seller to disclose potential problems with the property, they may not always know about the homes entire history.
6: Understand the taxes -Make sure that you know if your property taxes are rolled into your monthly mortgage payment or if you will be responsible for paying them yearly. Don't forget that you can often deduct the property taxes, points and interest paid on a mortgage. Keep all paperwork for your annual federal or state income tax return. If you use an accountant to prepare your taxes, schedule a meeting to learn more about the these types of deductions.
If you have any questions about anything involved, during the home buying process, you can rely on the knowledge and experience of a real estate professional, like me.