Buying a home for the first time can be overwhelming. In fact, even the term “first-time” is a little misleading. There are actually several ways you could fall under the category of “first-timer,” including being the spouse of someone who’s owned a home (but you have not), a single parent who has only owned a home with a spouse when married, or an individual who hasn’t owned a principal residence for three years. Once you’ve determined whether you or your spouse can be considered first-time homebuyers, here are some tips to keep in mind before putting in an offer.
What type of home do you want?
A condo or townhome in heart of the city? Or a 4-bedroom rambler with a huge yard? Narrow down your options by thinking both about what you need right now, and what you will probably need in the future. You can’t plan for everything, but knowing where kids, pets, your commute and your lifestyle fit in with your home needs can help narrow down your choices.
Be realistic about your wish list (and your budget)
You want a pool, sauna and exercise room – with a view – all for under $300,000? You’ll probably end up disappointed. It’s okay to have some “must haves” on your list; A yard, master bathroom, 3+ bedrooms, etc but if you find yourself turning down home after home because it doesn’t have a wine cellar, four bathrooms and a five-minute commute to your job, it might be time to reassess your needs.
Know that you can make changes
At the same time, keep in mind that you don’t have to keep your home as-is! Maybe an extra bedroom can become your workout room, or an unfinished basement can be redone as a playroom. Look past what’s right in front of you to the potential of the home and you could get your future dream home for a price you can afford right now.
Get your finances in order
The practical advice. Track your spending for a few months to really get an idea for what size mortgage payment you can comfortably afford. Become familiar with the basics of mortgage lending to get a better idea of how lenders will view your income. Have an idea of your credit score and debt-to-income ratio so you can be realistic about the size of the loan you can qualify for. And don’t forget to set aside money for closing costs when budgeting out how much house you can afford (typically 1.5 – 2 percent of the purchase price).
Citywide Home Loans make the loan process simple for first-time homebuyers. Visit www.citywidehomeloans.com/ to see how much home you can afford and find a loan program that’s right for you.