Thursday, February 01, 2018 / by Terri Bias
Buying a home for the first time is exciting. You are finally ready to get a chunk of land to call your own. With the excitement though can come some unforeseen hurdles. As with anything new, there can be some hurdles that can cause some problems if not prepared for. Below are 4 tips to be aware of when buying your first house.
1. Figure out what you can afford.
You don’t want to put all that effort into purchasing your dream home only to have it blow a hole straight through your bank account. A good rule of thumb is that the cost should be roughly double your gross income. For example, if you make $50k a year (either separate or combined with a spouse) then you could afford payments on a $100k house.
If you are currently renting somewhere, you can also use a mortgage payment calculator online. Most of the time the payment for a mortgage will be cheaper than most rents. If you can afford rent, you will probably be ok on a mortgage.
2. Get preapproved.
If your best friend suddenly asked you one day to borrow $100k out of the blue, what would your response likely be? Probably a very solid “NO”. At the very least you would want some more information on what they need it for. Your bank is no different. Be sure to start talking with your bank early before you buy. You don’t want to have your dream house picked out only to find out the bank won’t help you fund it. The bank wants you to have a mortgage (interest payments are how they make money), but they still have a very time-consuming process to get one. Be sure to start it early.
3. Research the area, not just the house.
You’ve heard it before, location, location, location! Before signing the official documents, do your homework on the area. Nothing could be worse than purchasing your first home and finding out a Walter White wannabee lives next door. Crime reports are available on several websites for free. Crime will happen everywhere, but you want to make sure that you aren’t in a location that has more than its fair share.
4. Plan for the future.
Make sure the house you’re buying has enough space for any future family members you may have. If there’s even a small chance that you will have either your first child or 3rd child, make sure you have space for them. It also helps (if it’s affordable) to have a few extra rooms. It’s much easier to start a new hobby if there’s already space for it. Even if you don’t want kids, extra storage space is always a plus.