Wednesday, March 19, 2014
Taking the fateful step of buying your first home is a huge commitment that comes with a lot of responsibilities, some of which may be new to first-time homeowners. Most first-time homeowners transition from renting a home or apartment, and so they find certain homeowner responsibilities such as routine maintenance and monthly mortgage expenses overwhelming and disconcerting. Get rid of these doubts and worries by planning ahead and taking cautious steps towards your dream home.
Calculate what you can afford
If you don't plan your finances well, buying a home can be a big financial burden. Even before you decide on which property to buy, you can start with calculating what you can afford. Know how much you can shell out for the initial deposit and whether you’ll need to dip into your savings.
Apart from this initial cash-out, you also need to assess your current monthly income and expenses. Include all expenses such as utility bills, transportation costs, groceries, household expenses and the like. Do you have enough leftover income after deducting the expenses? This should be enough to cover monthly homeowner expenses such as mortgage costs, maintenance, repairs, HOA dues and property taxes. If not, know which expenses you can drop or scrimp on to fulfill your financial obligations.
Calculating your finances well before you buy a home will put you in an advantageous position. When house hunting, you’ll know which houses you can afford right away, helping you avoid the heartache of falling in love with a home and realizing that you can’t afford it. This will also help you avoid unexpected debt and huge loan interests.
Research on home locations and property types
Buying a home on impulse may lead to unmet expectations and ultimately regret. Buying property is a huge investment, one you can’t back out on, on a whim. Make sure you make the right decision when you choose which property to buy.
Scout for locations that meet your needs and preferences beforehand. Consider your daily routine and the location’s proximity to your workplace or your kids’ schools. Assess the convenience of public and private commutes and the safety aspects of the neighborhood. Consider several locations for backup as well. Aside from the location, one important decision you’ll have to make is the type of property you choose. Know how much space you need and what level of privacy you prefer, as these are primary factors to consider when choosing between a single-detached home, a townhouse or a condo unit.
Assessing your full range of options and narrowing them down beforehand will make your home search more focused and tailored to your specific needs and budget. This will ultimately help avoid regrets and bad debt when you buy the property.