Buying a house can be one of the most exciting experiences in your life. However, it’s also a major transaction that requires a lot of thought and planning. Says Wade Kricken It’s important to know what you’re getting into before you make an offer on a property. Here are some basic rules for buying a new home
How to Buy a House for Your First Home
- Decide how much to spend
- Research the market and find a real estate agent
- Get pre-approved for a mortgage loan, so you can show sellers that you’re serious about buying
- Find out if you can buy the house you want by getting prequalified for a loan
How to Know When You’re Ready to Buy Your First Home
- You have stable income.
- You have a down payment.
- Your credit score is good or excellent.
- You have at least three months savings in an emergency fund.
Building Equity in Your First Home
Your house is an investment. It’s a financial decision with much broader implications than simply buying a place to live, and you should keep that in mind when making any purchase decisions.
Your first house is an opportunity to build up some equity—to save money by paying off your mortgage faster and being able to invest it elsewhere. There are two ways you can do this: either by increasing your monthly payments or by increasing the value of your home (or both).
It can be hard to know when it’s time to move on from your starter home, but there are several signs that will help you decide whether or not it’s worth selling when you’re ready for something bigger.
3 Most Common Mistakes New Homeowners Make
When you buy a house, there are a number of mistakes you can make. Here are the top 5:
- Buy too big / too small
- Buy in a bad location or neighborhood (e.g., near an airport)
- Buy too soon – don’t get caught up in the hype of buying at the wrong time and end up losing money on your investment
The Advantages of Being a First-Time Homebuyer
There are several reasons why it’s advantageous to be a first-time homebuyer. One of the main benefits is that, as you build equity in your home, you’ll have an asset that can help pay for future expenses or fund investments. You also have the opportunity to use your home as an investment tool – if you purchase a house with some equity, it’s possible that over time this asset will increase in value due to appreciation and inflation. In addition, owning your own place gives you flexibility with regards to moving or selling; after all, if things don’t work out at one location, then all you need do is move on! Besides these advantages there are other factors which might make buying a house more appealing than renting:
Should You Rent or Own? Financial Benefits of Renting
- Renting has tax advantages.
- Renting is less risky.
- Renting can be more flexible.
- You can move to a better location if you need to.
- You can save money for a down payment on a home.
Now that you know the basics of buying a home, let’s review some more tips and tricks.