Buying a home is exhilarating, but it can also be overwhelming. After all, this is likely the largest investment you’ll ever make, and it greatly affects your quality of life and financial future. That’s a lot of pressure! Follow these seven tips to help you succeed as a first-time home buyer.
- Pay off your debt and create an emergency fund: Before you take on a mortgage, it’s wise to be debt-free and have an emergency fund to cover three to six months of expenses. This protects you from financial setbacks if any unexpected home repairs crop up.
- Know how much house you can afford: A good rule of thumb is never to spend more than 25 percent of your income on housing. This means if you earn $7,000 per month, your housing costs should be no higher than $1,750—including your mortgage payment, property taxes, homeowner’s insurance, HOA fee, and premium mortgage insurance (PMI), if applicable.
- Save up for a down payment: The traditional amount to put down is 20 percent. If that seems out of reach, strive to save up a down payment of at least 10 percent. Your lender will most likely require you to get PMI, but you can refinance your mortgage once you have 20 percent equity in the house to eliminate this extra payment. Set aside another 2 to 5 percent to cover closing costs.
- Only hunt for homes in your price range: To avoid falling in love with a beautiful house you can’t afford, only browse properties that land within your budget. Remember, you can find a starter home now and move again in a few years, using the equity you’ve built to afford a more expensive home.
- Get preapproved for a mortgage: Show your preapproval letter to a home seller, and you’ll prove that you’re a serious buyer with a lender all lined up. This makes you more competitive, an important characteristic to have in a hot real estate market.
- Don’t underestimate the importance of location: A good strategy is to buy the most affordable home in the best neighborhood you can find. After all, the local crime rate and distance from amenities are more important than wood floors and granite countertops. You can always add these upgrades later, but you can’t change the home’s location!
- Work closely with your real estate agent: A good agent will help you with everything from finding a home you love to making a competitive offer to navigating the closing process. Carefully select who you work with to ensure a successful first-time home buying experience.
Vutech | Ruff, Corcoran Global Living is here to make buying a home as simple and stress-free as possible. We’ll assist you with every aspect of your house hunt while maintaining the highest level of professionalism. Get started now by checking out the homes for sale in Columbus, Ohio. Then, call us at 614-897-0618 or contact us online when you’re ready to get serious about buying a home!