Buying your first home is an exciting milestone, but it can also be daunting and stressful. A house is likely to be your biggest purchase and you must be careful to avoid making any expensive mistakes. Here is a guide on what to expect when buying your first home and tips to make the process easier:
Calculate how much you can afford
The first thing you should do if you’re considering buying a house is calculate how much you can afford. The amount of money you can borrow will depend on your financial situation and down payment. You can speak with a lender or use an online mortgage calculator to work out roughly how much you can borrow.
According to investopedia.com, “the typical rule is that you can borrow 2 to 2.5x your gross income.” So, if you and your partner have a joint income of $100,000 a year, then you should be able to borrow between $200,000 and £250,000. The amount of your income that goes towards your mortgage repayment should generally not exceed 28%.
Save for a house down payment
You will need to save a down payment before you will qualify for most mortgages. Many lenders ask for a down payment of 20% of the value of the property, although some lenders will approve a mortgage with a down payment as low as 5%. There is no universal minimum down payment and you will need to contact individual lenders to see what mortgages criteria they have in place.
Having a larger down payment will increase your chances of being approved for a mortgage with a good rate. A bigger down payment will also reduce your monthly repayments and save you money on interest long-term. Read this article for tips on how to save for a down payment.
Take advantage of first-time buyer schemes
Several schemes and grants have been introduced to support first-time buyers and help people get on the property ladder. First-time buyers should take advantage of government programs to support the first time buyer and use financial assistance to reduce the costs of buying a house.
For example, the FHA insures mortgages and offers loans for down payments to make it easier for first-time buyers to get approved for mortgages. First-time buyers can also apply for homeownership vouchers if they meet the required criteria. These vouchers provide first-time buyers on low incomes with subsidies to put towards buying a house.
Find the right real estate agent
Choosing a real estate agent is an important decision that will have a big impact on your house buying experience. Your real estate agent will guide you through the entire process and help you locate properties that suit your needs and budget. They will also manage the negotiating process and help you secure the best price.
A good real estate agent will have the experience and knowledge to help you avoid pitfalls and expensive mistakes. They will help you locate your dream house and get the best possible outcome. Take the time to find a reputable real estate agent and always read feedback and testimonials from other first time buyers. You can also ask family and friends for recommendations.
Start viewing properties
You can now start looking for suitable properties in your desired area and arranging viewings. Experts at On The Dot Removalsexplain how “this is the exciting part for a first time buyer, where you get to view houses for sale and imagine putting your own stamp on a property.” Make a list of desired property features to help you find suitable houses e.g. the minimum number of bedrooms you want.
Always ask your real estate agent how long a property has been on the market. You will have more bargaining power if the property has been listed for a while. Remember to consider your options carefully and never rush into making an offer. Buying a house is a big decision and you must make sure that it’s the right property for you and your family before you put in an offer.
Buying a house is exciting, but many first time buyers feel anxious and unsure of what to expect. Fortunately, there are plenty of resources to support first-time buyers. Your real estate agent should guide you through the process and help you find the perfect property. Take your time when you’re looking for your first home and make sure that you don’t rush the process.