3 Critical Steps to Take as a First-Time Home Buyer
Becoming a homeowner is one of life’s most exciting rites of passage. However, considering that a home is among the biggest purchases you will ever make, it’s important to navigate the process carefully. Follow these three critical steps as you purchase your first home:
Determine how much you can afford.
- While you’ve likely been saving for a down payment, you will need to handle ongoing expenses once you have settled into your home. A general guideline is that your house payment (including mortgage, taxes, and maintenance) should not exceed 28% of your gross monthly income. However, the best way to determine how much you can afford is to work with a lender for mortgage pre-approval. This may also help in the home search because it signals to sellers that your offer is financially sound.
Consider your current and future needs.
- Many first-time home buyers are at a stage in life where their circumstances may change significantly in the future. For example, they may get married, have kids, or change jobs. Therefore, it’s important to choose a home into which you can grow. Consider factors like the home’s size, neighborhood crime statistics, and school districts. School districts have a major bearing on a home resale value—making them an important factor whether or not children are in your future.
Do your due diligence.
- After a long search, you’ll probably be thrilled when an offer on your dream home is accepted. However, now is the time to do your due diligence. Consult your realtor about adding contingencies to your contract, such as the home inspection, which allows you to request that the seller resolve problems found by an inspector. For first-time buyers, many realtors will also include a financing contingency, which lets you rescind the contract if your loan application is rejected.
If you want to learn more about the home buying process, check out our home buying page
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