In 2019, 5.25 million homes sold in the United States. 2020 should see an increase in homes for sale.
Although buying a house for the first time is an exciting time for home buyers, there are also many things to consider.
Read on for a list of things to consider when buying a house for the first time.
1. Make an Inventory of Debts and Build an Emergency Fund
Everyone looking to buy a home knows that this process can be quite expensive. Before a first-time buyer can consider applying for a loan, they should make an inventory of all their debts.
Having large debts can hurt their chances considerably when applying for a loan. Lenders don’t want future homeowners to have sizable financial burdens.
When considering buying a home for the first time, it’s important to pay down their debts. Also, because having a house causes many unexpected expenses, it’s important to build an emergency fund.
2. Figure Out How Much You Can Afford
While it’s easy for first-time homebuyers to fall in love with a house, they have to keep in mind whether or not they can afford it. Buying a home that’s too expensive will require a higher down payment and monthly payment.
Homeowners who buy a house that is too expensive will have a financial burden in their hands. If they take on more than they can chew, they will also have to consider paying taxes, homeowners insurance, and other emergency repairs.
To determine how much you can afford, take your monthly income, and calculate 25 percent. Someone who brings home $5,000 a month can afford a monthly payment of $1,250.
3. Get Preapproved for a Mortgage
Many first-time homebuyers don’t know the importance of getting preapproved for a loan before starting the search for a house. Getting preapproved will give them an edge during the home buying process.
Once they get pre-qualified, they will know the exact amount of the loan, and they will know their price range. Sellers will also prefer an offer from a pre-qualified buyer.
4. Research Neighborhoods
First-time homeowners need to take into consideration not only the property they want to buy but also the neighborhood.
Buying a house based on the property while considering some characteristics of the neighborhood will make a smooth transaction. Depending on their needs, some first-time homebuyers have to consider the school district, the safety of the neighborhood, and distance to stores.
5. Think of Long Term Goals
Before buying a house for the first time, homebuyers need to think of their long-term goals. For example, do they plan on starting a family soon? If so, they have to consider if space is enough.
Other homebuyers might want the house as an investment property to improve and sell for a profit.
Things to Consider When Buying a House for the First Time
Now that you know what things to consider when buying a house for the first time, it’s time you search for the house of your dreams.
Start by minimizing debt, work out what you can afford, get preapproved, and think of long-term goals.
For more real estate tips, check out the rest of our blog.