Buying a house for the first time is a big project. Owning a home is a social sign of responsibility, financial stability, and adulthood. Contrary to what first meets the eye, buying a house is a process, not a one-time thing.
There are only so many things that make buying a house. It’s no wonder most people feel stressed during the process. From deciding on the mortgage and the right place, to signing the ownership documents, there are lots of things that could cause unnecessary worry to the buyers.
Moreover, buying a house is a long-term commitment and not always a good investment. To ensure you are satisfied with your purchase, take into consideration aspects such as deciding on money-related subjects, picking the right type of household and Neighborhood, as well as negotiating the price.
To learn more about passing the first time home buying with flying colors, keep on reading.
First and foremost, you need to establish all the money-related matters.
You might have heard house sellers say ‘I want to sell my house fast for cash’. It is widespread to sell a summer property when in a sudden need of cash. It may happen that one of these properties will be of your liking and you will be interested in buying it, with one single detail standing in your way – the cash.
The best tip for buying a house with your cash, no mortgage included, is to start saving early on. However, you might try saving your whole life and still not be able to pay for the dream house in your cash only.
That is why mortgages exist. Most first-time home buyers use them to purchase the property, and unless you are a millionaire, so should you.
Taking a mortgage is a big step. It indeed is a long-term commitment. That’s what makes a lot of people feel overwhelmed by the idea. However, it is impossible to avoid the long-lasting bond with the lender; it is possible to be smart about your mortgage.
Decide how much money you want to spend on the house, and what kind of mortgage to choose, based on your monthly earnings and expenses.
There are a variety of mortgage options available. Four main categories include:
- Conventional mortgages. Some traditional loans targeted at first-time buyers require as little as 3% down, but the government does not guarantee them.
- The Federal Housing Administration insures FHA loans. They allow down payments as low as 3.5%.
- USDA loans are meant for rural home-buyers and usually require no down payment. The U.S. Department of Agriculture guarantees them.
- Department of Veterans Affairs guarantees VA loans. They apply to current and veteran army officers and usually require no down payment.
After choosing the mortgage adequate for you, you need to decide on the time you will pay the money off. The majority of first time home buyers opt for a 30-year fixed-rate mortgage. It is paid off in 30 years, and the interest rate stays the same during this time.
A 15-year loan is also possible. It comes with a lower interest rate than the 30-year mortgage, but monthly payments are typically larger.
House type and Neighborhood
Choosing the right type of property is key to success when it comes to buying a house for the first time. Some people wish to live in a grand mansion in downtown LA. Others will enjoy the peace and tranquillity of the suburban terraced house.
Pick the right property type based on your lifestyle, budget, and vision of the future. Please take into consideration that it is most likely your house for at least a couple of years. Just because you don’t have kids now, doesn’t mean you won’t have them in the future. Think prospectively.
Moreover, pay attention to the Neighborhood. Check if places such as grocery stores, pharmacies, and post offices are close to your potential new home. Also, try to meet the neighbors. Ask them about their opinions on the Neighborhood’s safety, accessibility, and convenience of living.
Buying a house for the first time may be difficult and stressful. The process is complicated and tiring at times. To be fully satisfied with your purchase, make sure you pay attention to all the details.
Start by deciding on the way of payment. Are you going to pay it all in cash that you have saved over the years? Will you take a mortgage?
If you choose the latter option, make sure you know all the options available, so you choose the best one. Also, set the time of paying the mortgage off wisely. Most people pick the 30-yers option, but it may be that you will be able to pay it off earlier.
On top of that, choose the right house’s type, location, and Neighborhood. Ask people living in the area how they feel about the Neighborhood. That way, you will gain valuable first-hand information, as well as meet new people.