The choice to purchase your first home is one of the most important decisions you will ever make. The process of buying a home can be complex and overwhelming, but it doesn’t have to be. There are many advantages to owning your home, and if this is one of your most significant purchases, then you will want to ensure that you are doing everything right.
The reasons for buying a house
If you have come to the decision to buy your own home, then you did not come across this decision lightly. You may already be in the home as a renter and have decided that now is the time to buy your home outright, or maybe you have been living at your parents house to save money and are finally ready to move out and become a property owner. Whatever it may be, it is time for you to get into your dream home. So, you might want to start looking for newly constructed homes by developers like McKee Builders (friendshipcreek.mckeebuilders.com) or similar reputed real estate developing companies for your choice of house.
What to do before buying a house
Ensuring that your personal finances and credit history are solid is an important part of starting this off. You need to figure out how much house you can afford. To do this, you will want to calculate your monthly expenses, such as living expenses, and car payments (if needed), and determine how much money you can comfortably spend on a mortgage payment.
You also need to factor in other associated costs such as property taxes, private mortgage insurance, fixed expenses, and maintenance fees. Knowing how to become a homeowner and what that entails is incredibly important. Having your own place is a big deal, so making sure you are financially ready and have enough money to follow through is essential.
Key points on becoming a homeowner
If you are slightly undecided about going through the home buying process, you may want to think about what this could mean for your long-term financial situation and your own personal growth.
Own home
This is a time for you to have your own place. It is all yours, you are setting up the monthly payments, and deciding on your current budget. Builders similar to Hyde Homes (hyde-homes.com) even offer you the option of choosing your own floor plan, design inputs, etc. You could make the home of your dreams with the help of such builders, and it would be 100% your property. Subsequently, you will also be in charge of decorating, furnishing, home improvements, and whatever else you want to do to your home, you get to do it.
Renovating
You may not be wanting to renovate straight away, but it is nice to know that you have the power to do that when needed. Not only will it be a great experience, but it will increase property values if you ever decide to sell down the line and downsize.
Landlords
When people rent, they have to deal with landlords which can be a whole big thing if they are not good at keeping in contact and are hard to deal with. Landlords can also ask someone to move out at short notice which can be highly stressful and hard to navigate. This can also be applied to people who are living in their parents home as they may feel like they have a time limit to move out.
Mortgages can be cheaper
Renting can be quite costly as time goes by, with many people paying more in monthly rent than they would with monthly mortgage payments. Homeowners can go for fixed-rate mortgages, so they know just how much their monthly payments are going to be, without worrying they may be hiked up at any point and will have to pay more.
An investment
The housing market can go up and down a lot, so owning a home from professional new home builders and getting on the property ladder at a good time will help out in the future. Speaking to an expert like a mortgage lender will inform homeowners of the benefits.
The home buying process
Once you have decided on your budget for your home, it is time to get the ball rolling and get you on the property ladder. Below are just a few things that you will need to look into, but for an extensive list, you may want to check out websites such as guildmortgage.com for further information.
Down payment money
A down payment is a portion of your home purchase price paid upfront. You will normally pay your down payment on closing day, and then pay monthly payments for the rest. It is your choice how much of a down payment you want to give. Bigger down payments will mean lower monthly costs. Once you have figured out how much you want to put as a down payment you can start saving money.
Credit score
Your credit score is an important factor when you are borrowing money. A mortgage lender will look at your credit history so they can see how you have handled paying back payments previously, and check if you are trustworthy as well as able to afford the money you are asking for. Asking for a credit report will help you see where it is at the moment and how you can build and establish good credit if needed.
Raising your credit score
If your credit score is not at the level you would like it to be, it is important that you put steps in place to raise it as best you can –
- Pay any outstanding credit – if you have the money to do it – do it!
- Increase your credit limit
- Look at your credit report for any errors and flag them up
Research mortgages and find a loan officer
It is no use just going with the first mortgage price you see, you need to look around and speak to a reputable loan officer that knows the ins and outs of buying a home and what home loan would be better suited to the individual/couple. Most lenders are well-experienced and long-time officers, so they will be able to provide a strong service.
Pre-approval letter
This is a very important document. It comes from the lender stating that they are intending on lending you the amount you have agreed upon. With this letter, you can show that you are ready to buy a home.
Checking out homes and neighborhoods
With a real estate professional, you will be able to look into what homes you want to go for in your chosen neighborhood. You will have a better understanding of home prices whilst speaking with a professional, as well as go through competitive rates and if there is the potential for a lower price to be agreed upon. For instance, if you were to make a property purchase in Westfield, NJ, (https://sharonsteelerealestate.com/) then taking the help of experienced real estate agents could prove to be beneficial. The experts can help you out in understanding the pros and cons of living in the area, the amount that you need to invest in buying, and closing the best deal.
what to look for in a home
You need to be thorough when looking for a home. This means checking every corner to see if there are issues that may reduce the price (if they are not too serious). Anything you can do to save money will be worth it. Make sure to –
- Check for damp or water damage
- Check to see if the structure is sturdy and if there are any cracks
- Check the size of the home, will it be big enough?
- Look at the home without the staging techniques they put in – you’ll see it as it is
- Has it had its checks, e.g. electricity, gas, and plumbing?
- Is the neighborhood a secure one, and is it safe for families?
These are just some things you will need to look out for so you can have peace of mind that you are not using any emergency savings to fix things that could have easily been fixed before you moved in.
Making your offer
Your agent is there to negotiate your price and get it to a level you are all happy with. They will have background information as well as other housing prices to ensure that you do not go by how you feel, but by what the right price is for the area.
Closing
Once you have agreed upon the price and your loan reaches final approval, the closing documents will be signed by the previous owner in front of your estate agent so they can witness the transaction and know that everything is above board. Closing costs will also be paid at this time.
Finally moving out
Now you have put everything in place, the next step is finally going through with the moving out process and getting settled into your new home. If you are someone who has been living in your parents home, then this is a massive leap and can be fraught with a lot of blocks and emotions that you will need to deal with.
How to move out of your parents house
Not every first-time buyer is moving straight from their parents house to their own home, but with the current state of the economy, many young adults are having to stay with their parents a lot longer due to rising house costs, moving expenses, low monthly income, car insurance, and even more.
This can be incredibly hard to come up against, so a child finally moving out of the home to forge their own path is a great achievement. If you are in this boat, then you probably need some advice on how to handle this properly, so that when your move out date comes, you are prepared at all levels.
Moving out for the right reasons
Tensions can be incredibly high when adult children are living with their parents. They can butt heads and find it hard to navigate a house full of adults. During this time people can make rash decisions. So if you are looking to move out quickly and are not properly vetting mortgage offers, you could end up with something that drags you down with financial issues.
Do not suddenly leap at the first thing you find, but rather take some time out and really think. You may want to leave as soon as possible but you’ll end up right back at your parents house if it doesn’t work out and you do not want that.
Emergency fund
Having an emergency fund is a great way to keep on top of any expenses that could crop up when you move out. Maybe you need professional movers from a good moving company in your area to help you move your larger items. They are not exactly cheap, you will need to factor that in.
You need enough money to make it work, so start saving as much as possible right now. It makes more sense to do it before you start the moving out process as it can be harder down the road. Think about doing a garage sale to add to your emergency fund. You never know what you could sell.
Create a moving out list
This can be tedious to some, but you have got to pack up all of your things into boxes and they need to be labeled correctly for the move. Tiring? Yes. Necessary? Also yes. Don’t leave it till the last minute as you’ll be furious at yourself for doing so. You only need to be temporarily annoyed until it’s over.
what to take with you
The bullet points below are condensing what you need as what you are going to pack is unique to you, so this is only a loose guide.
- Bedroom (sheets, bed frame, pillows, mattress, clothes storage, rug, bedside table, lamp)
- Bathroom (toiletries, towels, toilet paper, bath mat)
- Kitchen (canned and boxed food, utensils, pots and pans, food boxes, cleaning supplies)
- Living room (chair, sofa, table/coffee table – you probably have bought your own and aren’t taking your parents!)
If you do not have much to begin with, that’s okay, not many people are able to furnish a new house or new apartment from the get-go, so just make sure you take the essentials that you will definitely need. A mini fridge and freezer are better than none.
Move and set up
The day has arrived, all the paperwork has gone through and you are now officially a homeowner. It is important that you speak to the utility companies and get your Wi-Fi, electricity, water, heating, etc. set up. With some, you can do it before moving, others have to be done whilst you are there, so timing is everything when planning that part.
Conclusion
It is a daunting experience to go through not only buying your first home but moving out of a place that was your home for many years. Whilst you may be consumed with the move and not thinking about how you are feeling at this time, it is important to take a moment and realize what you have done.
You are on the property ladder and have committed to your first home. So settle into your new address and remember that you are doing this for all the right reasons.