The time has come to buy your first house. While it’s a move in the right direction toward your future, the decision fills you with some anxiety. For starters, you need to not only know the right locations and properties to see, but you also need to have an awareness of the procedure. Then there’s the question of funds; you need to know for certain that you can afford to pay for your first home.
Here are three critical factors to help you make this all-important decision:
Obtain adequate funding for your home purchase
There are multiple fees involved with any property purchase. These fees are outside of the price of the home. So you might think you have enough for the mortgage, but you will need more money to pay for closing costs. These will typically come to about 2 percent to 5 percent of the home’s cost and will involve:
Recording fees (i.e., to record the deed)
Lender application fees
Fortunately, qualified first-time home buyers do have access to housing grants, which promote home ownership. Wasatch Peak Credit Union explains that a housing grant could help you get as much as $5,000 for your down payment or closing costs.
Compare prices and options online
More often than not, selecting a house involves being comfortable with the neighborhood itself. This is why most property advice will focus on the value of choosing the right location. If you have found one that suits your fancy, take this a step further and look for different available options in the same area. You are more likely to find some good deals when you can compare different prices and options in the same area. Sites like Streeteasy, Trulia, and Zillow all allow you to find deals easily with a click.
Save up for a down payment
Your down payment is usually 20 percent of the total value; some sellers reduce the initial payment down to 3 percent. Both options have their own pros and cons. A higher down payment means lesser monthly payments. Meanwhile, lower down payments means more monthly payments. A good way to figure out which will work best for you is to use online tools, like down payment calculator, or seek professional guidance from your property agent.
A house is more than just a basic need; it is a lifelong dream. You can fulfill this dream by following a few steps to ensuring a sound financial decision. Get enough funds. Do a comparison on price. Save up for a down payment. With a good plan, you can turn this dream into reality, sooner than you think.