7 Tips For First-time Home Buyers
Buying a house for the first is exciting but there are things you need to know so that you can get what you want without any problems and save money.
It is a brilliant idea thinking to buy a house. Buying a house for the first time is exciting but there are things you need to know so that you can get what you want without any problems and save money. Here are the top tips for first-time home buyers.
- Decide on an affordable house
Decide on a house that is within your budget so as to avoid overspending, stress, and pain that you don’t want. How you can do this, can be in various ways and they include:
- Online research on houses
- Using a trusted Real estate agent to get you a house
- Find a house of a cost you can afford by personally making visits to the area of interest.
- Hire a good real estate agent.
A real estate agent is a person who finds real estate for you based on your expectations and negotiates for you at the cost of the asset.
A house is an expensive investment for most people therefore it is critical to get enough knowledge on your side when doing a purchase, this can be done by a real estate agent.
Your real estate agent should represent the best interest, aid you make an informed decision, refer you to other professionals, for example, contractors you may need to ensure the property is in good condition.
- Save a down payment
Getting a house can be exciting but let that excitement get in your way and prevent you from saving a down payment for the house.
Your down payment requirement depends on the type of mortgage chosen and the lender. Some conventional loans aimed at home buyers for the first time with excellent credit allow as small as a 3% down payment.
Even little down payments can be challenging to save. For example, a ksh.30,000,000 house is Ksh. 900,000.Set up automatic transfers from checking to saving after deciding a goal with the help of a down payment calculator.
- Don’t buy a house for today’s life alone
To buy a house will be one of the big financial commitment you’ll make in your life, but before you agree to buy a house that you might think is your dream house, think of your long term plans. For example, Are you planning to get married? Having kids? Or stay at your current job?
In between 5 and 7years building real equity depending on the mortgage terms and market may not be possible. If you are not sure that the house will be the house for you in a few years, consider keeping searching for another one.
- Do not fixate on the buying price
When purchasing your first house, don’t stare at the buying price alone, consider all of the costs associated with your potential new home, which includes the cost of insurance, real estate taxes depending on the place you live, maintenance costs. These can quickly add up costs on the buying price.
It is a good idea to ask for upkeep extras like swimming pools, fancy heating, and cooling systems. In conclusion, find a house that is priced high but with low fees. This will save you money compared to a cheap house with high fees.
- Look beyond paint
As a new buyer, you may fantasize about your dream house in making changes for example changing the wallpaper or paint, which is okay but making changes to kitchens and baths and cabinets can be expensive in terms of labor.
People tend to focus on the costs of the cabinets and forget the cost of labor which can hike up the cost. When buying a house consider whether you can afford to buy the house.
- Get pre-approved and compare mortgage rates
Once a 20% save up have been established on the value of the home you can afford, then there is a need to get pre-approved and compare mortgage rates.
As a house buyer get at least three quotes from lenders and compare the rates and fees. Comparing mortgage rates from at least three lenders can save you money. Taking one quote from a lender is not good practice because you may be leaving money on the table.