Buying your first home can be an overwhelming experience. It’s important to remember that whether it’s your first or your fifteenth residential purchase, everybody has trouble with the process at some point or another. Don’t get too bent out of shape; there are a lot of things you can do to make everything run more smoothly. For starters, being sure to work with a reputable real estate agent ensures that you have an experienced professional looking out for your best interests during your search and subsequent transactions. A good agent will also be able to provide you with plenty of information that’s important to consider when buying a home, such as the school districts you’ll have access to, even if having kids isn’t something you’re considering for several years down the road.
The reason that buying a home is often a difficult process is due the intricacy of all the parts involved: regular maintenance, taxes, home insurance, any work you may have to do prior to even moving in, etc. It’s important to take all of the different variables into consideration before you start looking into buying your first home, because the more information you have during the buying process, the better deals you’ll wind up getting.
Before You Start Looking
Make a list of all the things that you want in your first home. Remember to be realistic about what you and your family truly need, and prioritize your list based on what’s essential and not the things that would just be nice to have. Highlight the nonnegotiable features that your new home must have, and don’t cave on them if they’re important to you.
Obtain your credit score. There are three different credit rating systems, and lenders have their choice of which they use. Be sure to find out what your score is on each of the three systems, so that you know what to expect depending on which of your scores is checked through your buying process. The better your credit, the better your mortgage rate offers will be. Additionally, your homeowner’s insurance premiums will be lower if your credit score is good. If your credit score isn’t as great as you’d like it to be, take some time to do things to improve it before you start shopping for a home.
Set a realistic budget. There are mortgage calculators available to help you estimate your potential costs when buying a home. You’ll be able to input different amounts at different rates to see what kind of deal you may be able to get, and how much you can afford to spend. Don’t forget that your mortgage payment isn’t the only cost you’ll be responsible for when buying a home—you’ll also have to pay property taxes, homeowner’s insurance, utilities, household maintenance, and general living expenses too!
Now That You’re Looking
There are a number of factors that can affect your monthly/annual expenses, your insurance rates, and your safety. Here are some to consider:
Location. Where your home is situated plays a huge role in your family’s safety. Firstly, if there’s a high crime rate, or the area is within a short distance of an unsafe area, you may be at risk, and it may also affect your insurance. Also, the house’s distance from the nearest fire department, and to the nearest fire hydrant, will factor into fire risks. You may qualify for a lower premium if the house has a fire hydrant that’s no more than 1,000ft away, and if there is a fire department less than 3 miles away.
Mother Nature. Natural disasters, such as hurricanes, earthquakes, and floors, are more likely to devastate some areas than others. Depending on the house’s foundation and structure, proximity to water, the area’s altitude, and other factors can contribute to how vulnerable the house is to the elements. Review the weather history of the area to see how frequently they’ve experienced severe storms, and the damage that the storms caused. This will help you assess how vulnerable the house may be. General homeowner’s insurance policies don’t cover flooding or earthquakes, so don’t forget that you’ll need to invest in separate coverage for those hazards.
Before You Make an Offer
Get a copy of the house’s loss history report. This report will show you the claims history for the house in the last five years, which will show you the problems that have occurred (that may become an issue for you in the future) that may not be apparent at the time.
Hire a reputable inspector. In order to take out a mortgage, it’s likely that the bank will send someone to assess the condition of the house, electrical system, septic system, and water heater. If you’re able to choose the inspector yourself, do some research and find someone with experience, instead of just clicking the first name that pops up on Google.
Find out about the house’s features. Fire safety systems are extremely important; the average fire damage claim in the United States is $33K! Smoke detectors and sprinkler systems cannot only protect your family in case of fire and reduce the costs of repairing fire damage, but they may also qualify your home for discounted insurance premiums. Security is another significant concern for homeowners. You can save up to 5% on your insurance premiums just for having a deadbolt lock on the entrances to your house! Monitored home security systems can save you up to 10%!
No matter what, you’re going to encounter bumps along the road to buying your first home (or any thereafter). Keeping the list that we’ve provided in mind can help you save money (and stress!) during your buying process. We wish you the best of luck in finding your dream home!