Investing in real estate is an exciting new chapter that many venture into. In fact, buying your first home is generally one of the largest financial decisions that one will make during his or her lifetime. Its exciting to begin to plan the changes or modifications you might make after moving into your first home. But, buying a first home is also unsettling and a somewhat daunting process for some.
Planning your purchase
When you begin to look for homes, it’s important to plan out your timeline for purchasing. You should ask yourself- will you be purchasing within the next month, or six months? Will this be your primary residence, or are you using this purchase for an investment opportunity? Do you have a suitable amount of money to place as a down payment for the purchase? If you are working with a real estate professional, these are some of the basic questions they will want to know.
It’s important to consider that purchasing a home is time consuming. Generally, several months should be allocated between searching for your home, selecting the right residence, submitting your offer, getting an inspection, searching for mortgages, and finally- closing. There are usually a few setbacks that come from purchasing a new home- and timelines are generally altered because of delays in paperwork, or processing times. It’s important to take note of this, and plan ahead for any obstacles that might come up.
Financial Implications
When searching for your first home, it’s also important that we consider the long term cost of buying a home versus renting a home. As a general rule, one should carefully consider the costs of homeownership. Comparing mortgage rates and other costs associated with purchasing a home such as homeowners dues, taxes and insurance should be weighed into your budget. It would be wise to carefully research rental rates in your area, and compare them to the cost of a monthly mortgage on a home purchase.
If you are purchasing a newer home, the costs of repair and/or modification are much lower than buying an older home. If you chose to buy a home that is over twenty years old, you should budget for repairs and costs to fix up your pad. Also, do your research and consider the age of appliances, roofs, windows, and interior fixtures of the home before you make your final decision.
Additionally, you should consider your current financial decision. Just because you might be making good money for a few months at your current part time job, doesn’t mean you should run out and purchase a home. You should ensure your income is steady and will be adequate for a consistent mortgage payments for years down the road.
Making the right choice
Generally, a seasoned real estate professional in your area can help you determine whether or not you should continue to rent, or make the leap into your first home purchase. In addition, it would be wise to consult with a financial advisor that can help you to plan for, and estimate future financial decisions that will be faced with home ownership. Remember, be sure you are considering all options for your living decision, and never make an impulsive decision. Take your time, and do your homework before you sign any paperwork.