As a First Time Home Buyer, you may be confused about how to make that home purchase happen. We all know it takes more than just the desire to buy a home in this day and age. It takes planning too. Here are some insights to keep in mind when working toward owning a home.
Finances for a First Time Home Buyer
First and foremost are your finances. As a first time home buyer, you need to have enough money saved up for a down payment and a steady income to pay your mortgage bill so that homeownership is in reach. Don’t think however that you have to have 20% of the purchase price for your downpayment. You can buy a home with just 3% down. However, on top of that there will be extra costs such as appraisal fees, home inspections, property tax escrows, homeowners insurance, and private mortgage insurance (PMI) if your down payment is below 20%. Then when you move in there may be repairs to your home or improvements and new furniture to fill the space. (As a first time home buyer, you will probably be buying a lot of furniture!) Make sure you are prepared for these additional expenses when you start to budget for your home purchase.
Timing for Your First Time Home Buyer Purchase
The ideal home-buying scenario is when you’re not in a rush. You don’t want to rush through open houses to later realize that you’ve overlooked some important features of the home or neighborhood. You also don’t want to rush into buying a home if you’re not sure that you will be staying in the same area for at least a five-year period. Do you anticipate a big job move? Are you applying to out-of-state positions? Then it might be in your best interest to wait until you are ready to settle down. It takes a few years to recover from the expense of moving and paying the closing costs, so a five year window is a safe one to plan on as a first time home buyer.
Final Words of Advice
Becoming a successful first time home buyer isn’t an impossible feat. You just need to be aware of what your step-by-step goals should be. Short on down payment funds? Save up. Feeling pressed for time? Extend that rent contract one more year while you settle your affairs. Taking a big leap at the workplace? Do it now.
Homeownership is on people’s success checklist because it is a good investment, and it gives you a sense of pride and security. Reorganizing a few things in your daily routine will make you a first time home buyer in no time. Just take it one step at a time, and remember to breathe.