Buying your first home is a huge milestone. In fact, it may be one of the most monumental purchases you’ll ever make in your life!
So, because buying your first home is such a big step, it’s essential that you ask yourself those important questions before making the leap. Asking these questions might help you save time, money and allow you to find your dream home. Here are 4 questions to ask yourself before buying your first home:
1. Why are you buying a home?
Now is the time to make a list of reasons as to why you want to buy a home. You’ll need to be sure that these reasons are realistic. Recent data shows that many millennial homeowners regret buying their homes.
It’s important to ask this question because recent data reveled that some young people regret jumping into the buying a home. A 2019 study shows that 51% of millennials regret purchasing their homes. The reasons for this regret include high monthly mortgage payments, too much house maintenance, and that the house has depreciated since purchasing. While this is not the case for every homeowner, it’s of course something you should consider. Be sure that you’re buying a house for the right reasons and that you’re prepared for the responsibility that comes with owning a home.
And if you’re buying a house because you think it’ll be less expensive than renting, make sure to do your research first, because this may not always be the case.
2. What’s your budget?
Before buying a house, you need to be realistic about how much you can afford to pay. Experts recommend that your mortgage payment shouldn’t exceed more than 25% of your gross income.
It’s important to be realistic about this because reaching beyond what you can afford to pay can cause immense stress. You also risk the possibility of losing your home.
3. Do you have a good real estate agent?
Having a credible real estate can make all the difference in finding you the perfect house to match your budget. A good real estate agent will have extensive knowledge on the market, neighborhoods, houses, etc. They’ll be committed to finding you a house that meets your wants, needs, and budget.
Before hiring a real estate agent you need to be sure that they’re a good fit. Interview around and ask for references or referrals from other homebuyers.
4. How will you finance the loan
There are various kinds of mortgage loans available. Each option will require a certain eligibility and down payment. Different options include Conventional Mortgages, FHA loans, USDA loans and VA loans.
You’ll also need to consider the length you want in a loan. You can choose a 10, 15, 20, or 30-year mortgage. The longer the term you choose, the lower your monthly payments, but the more you’ll pay in interest over time.
Some areas also offer first-time home buyer programs. This could get you low-interest-rate mortgages, down payment assistance and even assistance with closing costs.
Be sure to do thorough research on the types of loans available for homebuyers. This will ensure that you find the financing option that’s best for you.
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