Ready To Be A Homeowner? Here’s What You Need To Know When Buying Your First Home!
Purchasing a new home is an exciting experience. But sometimes, the first time buyer it has a tendency to be very overwhelming. Since you’ve never done anything like this before, there are many things you should consider. First and foremost, ask yourself what can you afford? A good way to figure this out is to think about all of your monthly expenses as well as all of your income for the month. You may find that waiting until you have some outstanding debt paid off can result in a much better home purchase for you. I personally found Capital One’s website to be quite helpful. It is full of tips and tricks a newbie can use to increase their intellect when buying a home.
While there are different kinds of mortgage loans – it is important to find the one that suits you. For my home buying experience I received an FHA loan, and because of that, I feel it’s the only one I should really describe. An FHA loan comes with some really nice features and a few downsides. All that was required was that I have decent credit, have been employed by the same place for 2 or more years, and have at least 3% total cost of the home to put down. Ideally, you would want to put down 20%, but very few people have 20% of the total cost of the home they want when buying. Keep in mind that you will need to furnish this home, pay closing costs, setup home-owner’s insurance, pay for various inspections, and certainly make some changes once you’ve moved in.
Without the 20% down, you will have to pay a PMI – Premium Mortgage Insurance. It is really something I wish was avoidable and I wish I had known more about at the time of purchasing. The good news is that in most states, your lender can’t continue to charge you a PMI once you own 20% equity in your home, or once 5 years have passed since your purchase. If after five years in your new home you are still being charged a PMI, be sure to call and say something because a lender can continue charging you for 2 years after that without any repercussion if you remain voiceless in the matter. There are other types of loans where PMI is avoidable altogether and I would strongly recommend asking your lender about those options or looking into any available online resources. Again, I recommend Capital One’s New Home Buyer Guide – I used it frequently when I was stumped on what to do.
Once you have found a house you like, you will need to hire termite inspectors, water/sewage inspectors, home inspectors, etc… I would strongly recommend a land survey to be sure you are getting what you think you are paying for. The reason for mentioning this is because you may find some things you don’t like, and with that you may consider that the cost of all these inspectors at the next place is going to be less than just fixing the problem. Consider this – when there is one problem, there tends to be many more hidden problems, and moving on to the next place may be a favorable option.
The most important thing I can recommend is that you have stability in your life financially, and that you take your time when buying. Do not just buy the first house you like. This is the next 30 years of your life. So keep these ideas in mind when searching for your first home – Research, Patience, and Financial. Good Luck!
I was selected for this opportunity as a member of Clever Girls and the content and opinions expressed here are all my own.