Deciding to take the leap and purchase your very first home by yourself or with your significant other is a huge step in your adulthood and your relationship. As excited and hopeful as you might feel, it’s also normal to feel a little overwhelmed about the unknowns to this process.
Doing anything for the first time can seem daunting, but just keep in mind that you will learn as you go. Taking the proper steps to prepare to buy a house now will serve you well in the future. Take a few moments to review this list that will provide you with clarification to some of your unanswered questions and common thoughts surrounding homeownership.
Decide What You Can Afford
You might find it tempting to look at homes out of your price range when you begin your search for a home, which is why it’s important to set the standards with your realtor early on in the process. If you are looking to buy a home with your significant other, this is the best time to take a good hard look at your financial situations. Determining how much money you can spend on a home requires you to review your savings, address any outstanding debt, calculate how much you can pay out for a mortgage—and still have enough for additional life expenses. In order to avoid stress and disagreements, take some time to discuss your goals with your significant other and make sure you are on the same page before jumping into this process. Managing expectations and committing to your plan will help you stay on track and skip over homes that are simply not in the cards for you at this time.
Prepare Your Finances
Once you have determined your personal budget, it’s important that you are able to qualify for this home based on a few variables. Things like maintaining a good credit background, having enough cash for initial costs, down payment and closing, as well as verifiable income(s). You should be preparing to purchase a home that you can afford today, not in a few years when your potential raise comes. Although it’s best to pay upfront, educate yourself about loans and grants in your area so you are not caught off-guard or put yourself in a position to pay high interest rates down the road. It would be in your best interest to start setting aside money early on for all the additional expenses that coincide with purchasing a home.
Shop for Mortgage Rates
Carving out time in your busy schedule to shop for the best mortgage rate might not seem like the best use of your time amidst all the other planning you are prioritizing. The fact is, many new home buyers are unfamiliar with the significance of shopping for a mortgage. Without prioritizing this step individuals are at risk to pay more out of pocket in the future as deadlines get closer and contracts must be signed. As you can imagine, this results in rash decisions and possibly accepting much higher premiums on a loan simply because a buyer is out of options or did not properly research. In today’s market, it’s more critical than ever to shop around for the best rate that allows you to put more of your hard-earned money into the actual home.
Review and Select Appropriate Insurance
Selecting the proper insurance coverage can be an overlooked component of the home buying process. The reason being, most individuals or couples are misinformed about the amount of coverage necessary to support their situation. Homeowners insurance typically provides financial coverage for basic accidents and damage, but it’s important to realize that it does not cover everything. Take some time to research the location or area you are looking to purchase a home. Is there potential to be impacted by any natural disasters or hazardous weather in this location? Determine if the neighborhood is located near water or a flood zone. Inquire about types of fixes required in the past to maintain the safety of this property. These considerations can help you decide what coverage you need as well as other necessary insurance you might want to purchase in addition.
Remember there are other major considerations that should be involved as you look towards the future of your relationship and your estate. During these times of uncertainty and change, it’s more important than ever to make sure that your future health and wealth is prioritized and secure. One way to do this is by choosing a life insurance policy that protects your loved ones and your future finances should you fall ill or pass away unexpectedly. There are many benefits to buying life insurance early on in your adulthood—as your health is likely in good standing and you will be eligible for low rates and premiums.
Think Long-Term
It’s common to feel impatient when searching for your very first home, especially if the process seems to be dragging out over a period of months. Keep in mind that the time spent doing background research now will likely save you hundreds or thousands in the future. The market is constantly changing and although at this moment things might not be in your favor; this could change quickly. Whatever you do, don’t settle on a home because you want immediate gratification and are simply tired of waiting. The right opportunity will come along in time, but more often than not, it requires you to be patient. You will be glad you stuck it out, listened to your gut, and didn’t make a rash decision.
Plan for Renovations
Prior to moving into a home, you might want to make some adjustments before the home you select is livable. Consider specific projects and your timeline to move in so that you’re not stuck without a place to comfortably live in. This requires attention to detail and proper coordination, but you will be relieved that you renovated the bathroom, the floors, or kitchen to make your life easier when it’s time to move in. It’s common that you will find areas that need to be fixed once you have already settled in your new home, but make sure you note what can be tackled initially to save you some time and prevent unnecessary headaches. Check out some common move-in renovations and professionals to contact that can help you get the job done right.
During the search to purchase your first home, it’s normal to feel a range of emotions as you sort through the many items on your to-do list and make divisions that will impact your future. Make sure you take a step back and imagine how you want to feel once you’ve found the perfect home. Understand that all of your efforts now will serve you well and the hours of research put into this process will be worthwhile. Communicate openly and honestly with your partner or anyone else involved and try to enjoy the ups and downs as you approach this milestone!