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What To Know About Buying a House

By
Real Estate Agent with RealMax Realty

Congratulations! You are ready to start thinking about buying your first home. Maybe you are sick of apartment living or you simply want your own yard that does not have to be shared with anyone else. No matter what your reason for moving is, buying a first home is an exciting life stage.

Unfortunately, there are plenty of negative emotions associated with this process as well, such as stress, anxiety, and fear. What if you spend too much on your house and are unable to afford the monthly costs? What if you discover serious issues with the home after moving in that will cost you even more? How will you handle repairs when that used to be up to the landlord? 

Don’t worry because these concerns are natural, especially with a big investment. The key to succeeding with your first home purchase is knowing what to expect. With that said, here are a few things to know when buying your first house. 

A Checklist of Needs

Many homebuyers come up with a checklist of things that they want in their first home. It could involve the number of bedrooms, the type of main floor layout, the size of the yard, the availability of nearby amenities, and other factors. While it is important to have this checklist in mind so you can find the best possible home, you should consider paring it down to a few essentials. Some things may not be nearly as important as your project, and if your list of needs is too long, it could eliminate properties that would work well for you and your family. Try to keep your checklist short and prioritize a few essentials.

Financing

The reality is that first-time homebuyers likely cannot afford the full cost of a home upfront. They are simply too expensive. This is why home loans exist. A home loan is borrowed money from a lender that covers the cost of the house so you can move in and own it. In return, you pay back the loan amount plus interest over a set period. There are many types of loans that you may qualify for, such as conventional loans, jumbo loans, VA loans, and FHA loans. Finding the right loan depends on your credit score, the type of down payment you can afford, your income, your debt, and your financial assets. 

The Inspection

In recent years, the real estate market has become pretty chaotic. Housing prices rose, and buyers became desperate to cover these payments. In many cases, they agreed to waive the inspection for a lower price on the home. This could be a devastating mistake. A home inspection by a professional will reveal any maintenance problems or future repairs that will come with the house. Without an inspection, you may not know about these issues until you have already moved in. Never waive the inspection because it could save you a lot of money. Additionally, the inspection report can serve as a guide to help you keep up with proactive maintenance once you move in. 

Closing Costs

Another element of real estate transactions that sometimes takes buyers by surprise is the closing costs. These are fees that are only paid once the contract is signed for a purchase. However, for buyers, they could be anywhere between 3-6% of the total cost of the home. Some variances may occur depending on the type of mortgage you have. For example, you might expect VA loans closing costs to be lower, but they tend to fall within that range. Either way, make sure you factor in these extra costs when budgeting for a home purchase. 

Building Equity

Equity is one of the primary advantages that buyers have over renters. When you own the property, every mortgage payment reduces the balance owed on your loan. The difference between the current value of the property and the remaining balance on your loan is known as equity. The more you have paid into the property, the higher your equity will be. There are a couple of ways to build equity in your home to invest in the future. First, you can pay a larger down payment so the balance owed is decreased. Second, you can continue making payments and allow natural appreciation to occur. Third, you can improve the property to raise its total value, which will benefit you when the time comes to sell. 

Is Now the Time For You to Buy?

This is an important question to answer before you start house-hunting. Some people jump into homeownership before they are ready to afford it. Others are wary of the costs even if they can afford it, so they hold off on buying a home. Now that you know a little more about what goes into buying a home, you can make a more informed decision about whether or not now is the time to take this next step. 

John Pusa
Glendale, CA

Hello Hugh Grant very valuable report for what to know about buying a house.

Jan 23, 2024 04:27 PM
Ed Silva, 203-206-0754
Mapleridge Realty, CT 203-206-0754 - Waterbury, CT
Central CT Real Estate Broker Serving all equally

Good information on the basics of home buying. It all starts with a loan officer letting them know their budget,

Jan 23, 2024 04:54 PM
Sham Reddy CRS
Howard Hanna RE Services, Dayton, OH - Dayton, OH
CRS

Thanks for sharing great information Hugh!!!

Equity is one of the primary advantages that buyers have over renters. When you own the property, every mortgage payment reduces the balance owed on your loan. The difference between the current value of the property and the remaining balance on your loan is known as equity. 

Jan 23, 2024 06:17 PM
Will Hamm
Hamm Homes - Aurora, CO
"Where There's a Will, There's a Way!"

Hello Hugh and great information to share with us on this subject here in the Rain.  Make it a great day!

Jan 24, 2024 08:56 AM