First Time Home Buyer Advice
Do you think you ready to be a homeowner? You might want to think about important things before you dive head first into the largest purchase of your life. Remember, when you become the actual owner of your house you’re responsible for everything on the property. That includes broken appliances, roof repair, plumbing and many other things that could go wrong. Check out the rest of the page to get great advice for people first starting out in the real estate world.
Begin saving for a down payment & other expenses
In order to purchase a new house, it is necessary to save enough money for the down payment along with other expenses such as moving. Nowadays, it is essential to have a down payment of at least 10 to 20% on the house you are planning to purchase. Unlike before, lenders are now more cautious with mortgage applications following the sub-prime mortgage meltdown. Other than saving up for a down payment, you will also need to have at least 6 months’ worth of mortgage payments available. Make sure you stash away money in a high-yield savings account as quickly as possible.
You should also make sure to downsize your living expenses. By downsizing your current living expenses, you could use your saved money for your new house. It is possible to cut your expenses by moving to a cheaper place, reducing your bills, or stopping from eating out frequently. For example, if you are renting a house with a huge rental fee, it would be wise to move to an apartment with a cheaper rent. If you’re not sure where the cheapest apartments in your area are, you could always look up for them online. Downsizing your living expenses to save enough money might be hard at first, but once you are able to adjust properly, it will seem like a piece of cake and you will have your new house in no time.
Invest into real estate courses
Getting yourself in a home buyer course is really helpful, especially if it’s your first time buying a house. The course will provide you with all the necessary information regarding the steps you will have to take in order to buy a house, apply for a down payment assistance, search for a real estate agent, and any other tips. Depending on who offers the course, the length would vary from a day to even a few weeks.
If you want to enroll in a home buyer course, it is recommended to check with real estate companies, local banks, as well as nonprofit organizations within your area. Sometimes you might find some companies which offer this course for a minimal cost, or even for free.
Determine a mortgage loan you can afford
It is also essential to determine just how much you can afford. A good advice would be to keep your mortgage together with your insurance and taxes between 25 to 30% of your income. Some experts would also advise you to limit your home cost to two and half times of your annual salary. If you spend a lot of money on your mortgage, it will be very difficult for you to meet your daily obligations, not to mention saving for a retirement might be a hassle.
While it’s true that your house is an investment which hopefully will appreciate as time goes by, it doesn’t mean you have to go beyond your budget. Keep in mind that a smaller house is worth the peace of mind. Spend only what you can afford.
Real Estate Guidance