Home Money Tips for 1st Time Home Buyers

Tips for 1st Time Home Buyers

1st Time Home Buyer Tips

If you have lived up till now with your parents, in an ancestral house, or rented places and are looking to buy a new home all by yourself, the whole process might feel overwhelming. Keep reading to know more about what you should consider as a first-time home buyer. 

Keep in mind the size, kind, amenities, and location.

  1. The most important thing to consider is how many people it can accommodate. You should not waste your money on something too big if you have a small family. On the other hand, cramming a large family into a small space can be equally difficult. So, do not just go by the BHK, go through the individual floor sizes and see what suits you the best.
  2. Check what kind of home you need as per your family’s needs: a house or an apartment. If you need an apartment, assess the floors that you think are most suitable, whether you want a building complex or a stand-alone flat. Alongside ponder upon what amenities you need: a gym, kids’ area, generator, etc.
  3. Finally, do not just buy a house you like. Choose the most convenient location, consider the means of transport you will be availing and then go for it. 

Thinking about funding

Once you have got some options, check your credit. Assess how much money you have to afford for any of the available options. Most importantly, you must not go beyond your limits. Do not apply for a loan that you know you will not be able to fulfil.

  1. Go for a mortgage loan which will give you a time period of 15-30 years.
  2. Have your mortgage pre-approval ready. In this way, you will be aware of your requirements as well as your financial capacity before directly making the deal.
  3. Build a good credit score for extra benefits.
  4. See the loan options that go best with your financial situation.
  5. Save enough for your down payment.
  6. Finally, keep in mind the closing costs which range from taxes, appraisal, and attorney fees, to homeowners’ insurance and so on.

Financial planning is the key.

As already mentioned, a sound financial plan plays a foundational role when buying a house. You cannot look for a house, or for its funding for that matter if you do not have sufficient credit. Therefore, you have to keep in mind and work towards a financial goal before you can actually buy a house. 

  • If you think you want to buy a house today, going and applying for a loan is not the way out. It takes a lot of time to check on your expenditure, and substantially build your savings.
  • For a good credit score, it is good to keep your debt-to-interest ratio or DTI below 43%.
  • It is always better if you can cut down your housing expenses which include taxes, insurance, etc to not more than 30% of your gross monthly income. This can vary from real estate market to market but this is the general statistic.

So, a lot of thought goes behind buying any real estate property. On top of that, if this is your first time buying a home, it might be confusing. You have to check your funding and at the same time keep in mind your and your family’s necessities and preferences. So, sit and have a productive discussion with trusted professionals such as your lawyer and bank manager before you make any move.

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