Shopping For A Single Family Home For Sale? Smart Buying Strategy Tips For First-Time Homebuyers
Becoming a first-time homeowner has the potential to be both a wonderful experience and a great way to start building a family's financial wealth. Unfortunately, it can also be the beginning of a costly disaster that too often ends in foreclosure or bankruptcy. If you are buying your first single family home and want to make sure that doing so is a positive experience for your family's future, the following information will offer you smart, time-tested buying strategy tips to help you succeed.
Wait to buy until you can afford a 20 percent or larger down payment
While there are several mortgage options available with minimal down payments, buyers who use these loans will have very little or even no equity in their home for months or even a few years. This can leave them at risk of becoming "upside down homeowners", should the value of their home drop or they find themselves unexpectedly having to sell during their first few years of ownership. Even worse, homebuyers who do not put down at least 20 percent when purchasing will be required to pay private mortgage insurance, which can add hundreds to their monthly payment amount.
Choose a price range that is easily affordable on your current income
First-time homeowners are often still building their careers and looking ahead to advancement and salary increases. What isn't good, however, is making the mistake of agreeing to buy a home based on the amount of money you think you will be making next year. Homebuyers who make this mistake can find themselves in a difficult financial position, should the expected salary increase fail to materialize. It is always less risky to make sure that the home you purchase will be very affordable on your current income level.
Educate yourself on recurring costs before making an offer
In addition to the initial price range, first-time homebuyers should also be sure to educate themselves on the associated costs of living in the home and make sure that each cost is affordable on their current budget. In addition to the principal and interest payment, homebuyers need to know and budget for:
- home insurance premiums
- real estate taxes
- HOA fees, if applicable
- average heating and cooling costs
- average annual maintenance costs
- utilities and services
- periodic repairs and replacement costs of the roofing and systems like HVAC and plumbing
Doing the research to estimate these costs for each home you are considering will help you select the one that will best fit your budget now while also helping to ensure that you continue to feel content and comfortable in your home throughout your ownership.
To learn more about buying a home as a first-time homebuyer, take time to find and work with an experienced, caring real estate professional in your area.
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