In a sellers’ market, it can be challenging for buyers to find their dream home and negotiate a fair price. However, there is good news: There is also a buyers’ market within the sellers’
The Ultimate Guide To Buying Your First Home
Dated: June 1 2022
Purchasing your first home is often the culmination of decades of hard work. It’s a momentous occasion for anyone, but especially for young professionals who are just starting their independent adult lives and may have limited financial means to do so. If you’re in the position to buy your first home, congratulations! This is an exciting time in your life. But with many different responsibilities and expenses that come with home ownership, it can also be a stressful one. Fortunately, there are several real estate agents out there who specialize in helping young professionals navigate the housing market as first-time buyers. Their advice will prove invaluable when it comes to making the right choices when purchasing real estate. In this blog post, we discuss some helpful tips to get you started on your journey as a first-time homebuyer.
Research Your Options
First-time homebuyers often overlook the option of renting a property. Renting allows you to live in a home without putting down any money upfront, which can make it more accessible to first-time homebuyers who may not have the financial capacity to purchase a home immediately. Additionally, renting provides flexibility that homeownership does not, as you can move at any time without having to deal with a long and expensive process of selling your home. If you’re leaning towards buying a home over renting, you’ll want to research the different types of properties available to you. This includes both renting and buying single-family homes and multi-family dwellings (i.e. apartments, condos, townhouses, etc.). While both renting and buying can be excellent ways to invest in yourself and your future, the two are not created equally. There are many factors to consider when making this decision, including your budget, lifestyle, and long-term goals.
Estimate Your Monthly Housing Costs
Once you’ve narrowed down the type of property you’d like to buy, you’ll want to research average monthly costs of ownership. To start, you can use a mortgage calculator to estimate your monthly payments based on the amount you plan on borrowing. You can also research average insurance costs and property taxes in your local area. Depending on the type of property you’re looking to purchase, the average monthly costs of housing could range between $500 and $2,000. Keep in mind that the numbers you see in your research could be higher due to a number of factors. For example, if you’re buying an expensive property in an urban area, expect your monthly housing costs to be higher than someone who buys a modest home in a more affordable suburb.
Finding the Right Property
Finding the right property to buy is a big part of the home-buying process. When searching for a property, keep in mind that you’re likely to find more lucrative homes in popular and well-off neighborhoods. However, that doesn’t mean you can’t buy a nice home in a less affluent neighborhood. You just want to proceed with caution. You’ll want to make sure the neighborhood you’re looking to buy a home in is safe and livable. Ask the real estate agent you’re working with for advice on neighborhoods in your area. They’ll be able to provide insight on livability, safety, schools, and other important factors. You should also conduct a home inspection before buying a property, especially if it’s an older home. A home inspection is an inspector’s detailed examination of a home’s condition and systems. They can identify any issues with the house that you might not have noticed, helping you avoid costly repairs in the future.
Decide on a Mortgage Type
There are a few different mortgage types available to first-time homebuyers. The best one for you will depend on your financial situation. A mortgage broker or real estate agent will be able to walk you through the differences between the types of mortgages available and help you decide which is best for your financial situation. - FHA loans: FHA loans are government-backed mortgages that are typically easier to qualify for than conventional loans. This makes them great for first-time homebuyers who may not have strong credit. FHA loans are available with fixed and adjustable rates. - Conventional loans: Conventional loans are not government-backed. This means that you’ll need a down payment of at least 20% of the home’s total cost. However, conventional loans are typically easier to qualify for than FHA loans, making them a viable option for first-time homebuyers with less-than-stellar credit. Conventional loans may be fixed or adjustable rate mortgages. - VA loan: VA loans are government-backed mortgages that are specifically designed for veterans. VA loans require a down payment of only 3.5% of the home’s total cost.
Buying your first home can be an exciting and rewarding experience. However, because it can also be financially taxing, it’s important to be financially prepared before beginning the process of home-buying. This means conducting thorough research on the type of property you’d like to buy, estimating your monthly housing costs, and choosing the right mortgage type so that you can purchase the property you want while staying within your budget. With these tips, you’ll be well-equipped to begin your first-time home-buying journey.
Nick is the Founder and CEO of Black Castle Properties. He is also a Licensed Real Estate Broker with over 9 years of experience and an extensive background in sales. He understands the complexities o....