How to Choose Your First Home

You might be in the market for your first home, but the process can be a little overwhelmed. There are several things to consider when thinking about choosing your home, such as location, what you need in a house and why you are buying it. Here are a few tips to help guide you toward your new home.

Things You'll Need

• Patience
• Time

Instructions

1. Before you even start your search, it's imperative to know what you can afford -- especially the monthly mortgage payment. Keep in mind, you'll also have to include taxes, insurance association fees and general maintenance. All of this adds up. You don't want to end up being "house poor," meaning you live in a home, but can't afford to live your life.

2. Many people have gotten into trouble because they chose interest-only loans with a variable interest rate, which can balloon and increase your payment beyond what you can afford. Consider a stable 30-year fixed rate; that way, you won't have any surprises and can budget accordingly, year after year.

3. Make a list of the things you can't live without. Then make a list of things you'd like to have and be sure you and your spouse agree on the differences. Maybe living on a busy street is a deal breaker. Maybe living in an area with good schools is an absolute necessity. Only you can decide and this process is a good way to start figuring it out so you're not wasting your time visiting homes that don't fit your needs.

4. Don't buy the first home you see, even if you love it. This is probably the biggest investment in your life and you deserve to see what's out there before settling down.

5. Ask yourself what the purpose of the home is? Is it going to be an investment property? Or will this be the home that you will live in for the next 10, 15, 20 years? There are different variables to weigh with the different scenarios.

6. Look at the size of the home. Is the home big enough for your needs now and in the future? Do you plan on having a family or relative move in with you? If so, you need to consider how much room you'll need.

7. The commute should factor into your decision to buy. How far is your home from your place of work? Is the home worth the extra or less miles to work? As you know, long commutes may detract from your quality of life, even if you love the home. Plus, consider the extra cost in mileage and maintenance on your vehicle.

8. Most cities and suburban police departments will have a crime map that you can peruse. It's a good way to discover if there is a crime problem in your neighborhood that you were previously unaware of.

9. Talk with the neighbors before buying. They will probably give you information on the neighborhood, and if you meet a Chatty Cathy, probably a lot more gossip than you'd like.

Tips & Warnings

• Never purchase a home without a home inspection.

References

• ANZ: Buying Your First Home