Prospective first-time homeowners often find themselves dreaming of having a space to call their own—one that they can spruce up and hunker down in all at once. One that they can really make their own.
However, that daydream can quickly fall back down to Earth without the right planning. To keep your head in the clouds and stay grounded on your first house-hunting adventure, keep these three tips in your back pocket.
#1 Trust the Pros
You don’t have to brave the rocky waters of real estate alone. Consider consulting a professional in the field to make your house-hunting experience a breeze:
- Refer to an accountant for advice on budgeting for your dream house and getting preapproved for a loan (more on that a bit later). After all, a helping hand during this budgeting process can prevent the pull-your-hair-out stress that gives HGTV the drama they need to keep their ratings up (will they love it or list it?).
- Hire a real estate agent who knows the area to find you listings that meet your needs and your budget.
- Get a home inspector to check out your prospective house for any unforeseen issues. If you have a contingency written in your contract, this inspection is crucial for spotting anything that might compel you to cancel your contract. It can also serve as leverage for pricing negotiations.
#2 Get the Right Loan for Your Situation
The Federal Housing Association (FHA) doesn’t always make financing your home easy. Depending on the average value of the homes in your county, your credit score, or your personal situation, the type of loan you need might not meet the FHA’s strict requirements:
- If you’re looking to make your first home extra swanky, consider applying for jumbo loans for higher mortgage amounts instead of your regular financing method.
- If your credit isn’t as stellar as you’d like it to be, or if you don’t have a huge nest egg saved up for your down payment, you can apply for a more lenient FHA loan.
- For active and off-duty veterans (and their families), VA loans are an excellent alternative—they boast low interest rates and no down payment for you to worry about!
Jumbo loan or not, don’t let your financing get jumbled—be sure to get preapproved for a loan in advance. That way, you’ll know what type of houses you can actually afford. Even your dream home can become a nightmare when that interest rate comes in.
#3 Budget Far in Advance
It’s no secret that buying a home is expensive. It’s also a long-term commitment, which demands long-term planning.
Here are some tips for budgeting for your very first home:
- When calculating your approximate homeowner expenses, take into consideration increased utilities, maintenance, mortgage payments, interest rates, and HOA fees on top of your down payment.
- Don’t neglect to account for the increased cost of living if you’re also moving to a more expensive neighborhood or city. This includes higher tuition fees, commerce, and taxes.
- Once you’ve gotten your new housing expenses down, start saving ahead of time by cutting down unnecessary expenses like dining out frequently and grabbing that extra latte on the way home from work. Work hard on debt repayment in the meantime, so you only have to worry about your mortgage when the time comes.
Take a Deep Breath and Enjoy the Process
Buying your first home doesn’t have to be a stressful experience. With the right planning, budgeting, and professional support, you can enjoy house-hunting the way it should be enjoyed. If you’ve played your cards right, you can lean into your home-buying journey with all the excitement and wonder of a kid in a candy shop (with a way higher budget).
Image Credits: istockphoto.com
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