Buying a home can be a nerve wracking experience for some. Heck, it was for me. Other people I know approach it with an attitude of nonchalance.
In my opinion, these two extremes aren’t ideal. When buying a home, you should treat the experience with the seriousness it deserves. On the other hand, you shouldn’t be losing sleep over it either.
In this article, I’ll give you 4 serious things you must do when buying a home. Doing these things will let you sleep peacefully at night and make your life much easier down the road.
Use first time home buyer assistance programs
- Fannie Mae.
- The department of Housing and Urban Development.
- The FHA.
What do these government (linked) entities have in common?
Yup. They all offer first time home buyer assistance. These are official programs and benefits for people buying their first homes. Some benefits include having to pay less down payment when purchasing your property.
Their programs and requirements differ between agencies, and the details of these are outside the scope of this article.
However, a quick online search can set you up in the right direction. You’ll also be able to see what you can qualify for. Look carefully at their requirements.
Do they require you to be pre-approved for a home loan? Do they require you to be a resident in the house for a certain number of years?
You have to be very wary of their stipulated requirements. Heck, I once knew of a couple who had the process delayed for months because they hadn’t read the requirements carefully.
Create a budget and figure out how much monthly payment you can make
If you’re used to a certain level of spending, or a particular lifestyle, then you have to take that into account when applying for a loan.
Let’s say you enjoy taking a couple of weeks out every year to tour Europe. Can you really take on a high monthly mortgage payment?
I’m not saying that there’s anything wrong with enjoying the finer things in life. But if you know that your lifestyle can’t budge, then your loan amount definitely has to. Do not overextend yourself!
Beware of the things that increase your monthly payments
Your loan repayments and interest aren’t the only monthly outgoings when you own a property. Some things that factor into your payments up are:
- Home owners insurance premiums and property taxes (also known as PITI)
- Property taxes
Don’t underestimate the impact of these things! I know of some people who had to pay even more property tax than interest! They moved out of that state as quick as they could.
Do a property inspection and get professional help
Would you buy a car without going for a test drive first? I wouldn’t!
While you can’t live in a house before you buy it, doing a proper inspection beforehand can save you stress and grief down the line. If you can, hire a qualified inspector to help you with the job.
A qualified inspector can raise concerns about the place, and identify if things like electrical wiring or plumbing needs to be repaired sometime soon. They also have been involved in numerous property purchases, so they’ll be able to look for things that you didn’t even know to check for – like water drainage and easements.
A professional might set you back a couple of hundred dollars, but they are well worth it. And if you want to cut back on costs, you could look for people who offer “informal” advice.
For example, I once hired an ex-builder to verbally tell me what he found wrong with a place while I followed him around taking notes. Saved a pretty penny on that one and got excellent advice!
Putting in the work early on can seem like a real drag, especially when you’re bogged down by the financial and emotional aspects of buying a home. However, getting it right at the start can give you peace of mind in the years to come.
Really, you have a choice – put in effort now, or spend the next few years correcting mistakes in the house.
Now I’m wondering – do you guys have any advice on what a property buyer should do when buying a home to save them headaches in the future? Let me know in the comments!