Buying your First Home: Can you Afford It?
First time home buying. One of the first biggest purchases in life. That is a scary concept for many and there are countless questions that need to be answered before the actual home search can begin. The most widespread question though, is “Can I afford it?”. This article will discuss some of the most popular costs to take into consideration when buying your first home.
“Will I be able to comfortably afford my new house?”. There are a lot of unknown expenses that one needs to take into consideration when deciding to go from renting a place to buying a house for the first time. Below are some of the new costs to account for when purchasing a home.
Monthly Payment: Getting pre-approved for a loan should always be your first step in the home buying process. It is often overlooked by the enticing idea of walking through homes, but the issue is that you don’t have a clear understanding of your budget if you have not been pre-approved. Real estate professionals work with amazing lenders & mortgage brokers and getting connected will allow you to get the exact amount that you are pre-approved for. A pre-approval is generated from sharing your income, debt, taxes and credit score with the lending professional. Then, it is inputted into an application. To truly see your house spending potential, it is imperative you connect with a professional to help guide you through your first purchase. Plus, there are many first time buyer incentives and cash back programs at close to get you started on your first home!
HOI: Home Owner’s Insurance is required to purchase a home. This type of insurance protects your home, personal property and various other elements that need safeguarding when owning a property. Reaching out to your real estate professional for a great referral will help ease the process of finding a reliable and honest insurance agent. Another tip to save you money each year is to combine your home and auto insurance into one company.
Taxes: There is no getting around paying the dreaded city property taxes when you own a home. However, if you are not too picky about the neighborhood, your real estate professional can help guide you to cities that charge you less in taxes on your property. The more flexible you are in location, the more money you can save and put towards updates on your new home.
Maintenance: Things break! Many home items can be out of date, old and will eventually stop working! When purchasing a home, you have to think about whether you want to become a ‘do it yourself-er’ or hire a professional. Maybe a combination of both will be your forte? Making sure to understand the age of the major elements of the house is important to consider when purchasing your first home. Older roofs, furnaces, AC’s, HWT, and appliances are items that may need to be replaced soon after purchasing the home. If not updated, these items will also effect the resale value of your investment. Your real estate professional will help you understand how you can use the older items to your advantage when making an offer and make sure you are securing a great investment.
Renting VS. Buying
Will you enjoy renting or buying a home? That certainly depends on what your goals, wants and needs are. The question lies more in the amenities. Do you want to be able to paint your walls, be creative, and make your space your own? Do you want to take on the chore of cutting the grass but be able to plant a tree and watch it grow? Do you want to invest your money to have freedom of ownership? These questions can only be answered by you. Think about what stage of life you are in and make sure to act accordingly. Did you know that real estate agents can also help when looking for a rental property? Having a real estate professional on your side can help you make the best, most educated decision for every stage of ownership that you are ready for.
DREADED DOUBLE PAYMENTS
The most feared situation people have is purchasing a home before their lease is up and having to make a double payment from both the rental payment and mortgage. To avoid this situation, you should establish a relationship with a real estate professional 6 months before your lease is up. This gives you and your Agent time to ‘dig’ into the market. You can begin your search online with a daily email, directly from the MLS (Multiple Listing Service). This is where all real estate agents input the listing information for homes for sale in your area of interest. It takes about a month or two when you are buying a home for the first time to figure out exactly where you want to be, what your needs are in the home, and what your budget is. It is best reach out as early as possible to get the maximum time necessary for you to feel comfortable with this next large financial step in your life.
As a real estate professional, I connect my clients with trusted lenders that provide detailed, personal financial information and stay with you until the end of the home buying process. I recommend HOI agents to give you quotes so you can compare them and make the best decision for your needs. I am dedicated to my clients to get them exactly where they want to be while focusing on their pre-approval limit. This isn’t a decision one needs to rush into, so let’s take our time and dig into the housing market together. Contact me HERE to get started on finding your perfect first home today!
Written by Stephanie Sacco. Stephanie Sacco is a Metro Detroit realtor with Michigan Power Brokers who specializes in finding the perfect home for first time home owners. If you would like to get in contact with Stephanie, please reach out at 248-229-4523 or CLICK HERE.