Fed up with living out of a bedroom in your parents’ place? Got a new job and need to relocate? Whatever your reason for buying your first home, this is very likely to be the biggest purchase you’ll ever make in your life. So, it’s important that you get it right. This is not about buying a property on a whim, pulling one off the shelf, it takes time – that is, if you don’t want to be left with spiraling costs and regrets. Here are some things you need to know as you prepare to put your foot on the property ladder for the first time.
Know your budget limits
Many of us would love to live in a spacious mansion in a beautiful part of the world, but you need to be realistic when it comes to financing your first home. You don’t want to be spending so much that you leave yourself with barely anything to live on each month.
When thinking about how much of a mortgage you want to take account, go through your finances with a fine comb – analyzing everything you spend every month, where you can make savings, and how you can build in a buffer if you had some emergency costs.
Obviously, any savings and your level of monthly income will come into all of this. Ask yourself, ‘realistically, what can I afford?’ This is a crucial part of the buying process and, if you’re not strict with your financial analysis, you can bet your mortgage lender will be – they won’t want to be taking any risks. You also need to think long and hard about what kind of mortgage or home loan you will be taking out, whether it’s a conventional mortgage or otherwise.
Once you’ve thought about the finances, then you can seriously start looking for your first house – with a budget, and realistic expectation, in mind.
Think about getting pre-approval for a home loan, so that you know how much you’re likely to be able to borrow for your first property. This can really focus your mind on what is available to you in the housing market, what size of property you can afford, where you should be looking and so on. It may also help boost the confidence of a seller who’s interested in you.
First time buyer specials
It’s important to remember that as a first-time buyer, you are special. And that means that you might be able to benefit from a promotion or incentive scheme. Shop around banks and governmental organizations to see if there’s anything on offer to you, in the area where you’re looking to buy. It could help make the difference.
Real estate agent
Finding the right real estate agent is important, especially when buying your first house. They know lots more than you about the housing market, they can help and advise you. Think carefully about who you choose, you may want to ask colleagues at work, family or friends for any personal recommendations.