Purchasing your first home can be a monumental step. Therefore, as a first-time home buyer, you should follow several unwritten "rules" that will help you make sound financial decisions in the many aspects of the deal that you will have to consider--from budget planning to aesthetics to the financial impact of closing and inspection costs.
First-time home buyers should make sure they will reside in one location for several years before making their first real-estate investment. Next, buyers should determine what their needs are, such as the desired location and the type of home they wish to purchase.
First-time home buyers should ensure they have enough money saved toward the home’s down payment, inspection and closing costs. The minimum to put toward a home mortgage is typically 20 percent. This amount is important; it usually will garner a better interest rate. Buyers should arrange for a lender to assist them in the home loan pre-qualification process so that they know how much can be spent on a home.
Buying a small "starter" house, instead of a larger home, can save the first-time home buyer money, according to Castle Wealth Advisors. Financial mishaps can occur when first-time home buyers take on larger houses and mortgages than they can handle. By making smart choices and saving money each month on housing costs, the home owner will soon be able to buy the bigger home of his dreams.
Financial experts suggest that first-time home buyers plan their home mortgage budget based on one income. This is because these experts know that future events, either planned or unplanned, such as starting a family or losing a job, can substantially reduce your household income, as could other unpredictable life events, including a death in the family.
The Final Rule
The overall rule of taking on a first mortgage is being able to have peace of mind. If an impending loan makes the perspective home buyer feel unduly anxious, this may indicate that it simply is not the appropriate time to be making such a major purchase, and postponing ownership of his first home, at least temporarily, might be a wiser decision.