I thought that it might be a good idea today to discuss tips for buying your first home. Believe it or not, this is an issue that many first time home buyers make “schoolboy” mistakes.
If you think I am lying you just go back in your memory lane to the subprime mortgage crisis to realize that this is not a straightforward matter for most people.
For those who are not aware of what I mean about the subprime mortgage crisis let me explain it for you. The subprime mortgage crisis was a financial crisis that happened between 2007 and 2010 when the real estate market collapsed and homeowners defaulted on their loans.
All this led to the great recession that cost millions of jobs in the United States and the rest of the world.
While the blame for this crisis could be placed on so many players, the borrowers too should share the blame. The borrowers took advantage of the low rates and lack of proper scrutiny from lenders to borrow more than what they could afford.
The result was a disaster that affected millions of other people who had no mortgages as the resulting financial crisis caused a severe recession. More than ten years later we are still feeling the effects of that crisis.
Table of Contents
Tips For Buying Your First Home
So what are the tips for buying your first home that are super important for all first time home buyers? Below are some of the tips that one should bear in mind when thinking of buying your first home.
Don’t Overstretch yourself financially: Mortgage payments
Before you even decide to start searching for your first home take time to seriously consider your financial status and how much you can afford. Never ever make the mistake of viewing houses or searching for houses before you make up your mind on this.
As a rule of thumb, I would suggest that you only go for houses whose mortgage payments are within the range of your current rentals. If you are paying $500 per month and you are comfortable with it then maybe that is what you should be the sealing for you.
In making this decision be aware that if your mortgage loan has variable interest rates then that sealing should take that into account. At the moment the rates are low but that is because the central banks are trying to fight the economic problems that we are in at the moment.
I would, therefore, go back in recent history to see how interest rates have moved to see the highest rates that have been used before. If you are in doubt you could ask mortgage advisers and other financial experts on their expectations over the term of your loan.
Don’t be like the homeowners who lost out during the subprime mortgage crisis when all of a sudden they discovered that they could not afford their payments. A slight increase in interest rates can lead to unmanageable increases in payments for those who stretched themselves too much.
Related Posts: Biggest Budget Challenges And How To Solve Them
Steps to Manage Your Personal Finances Effectively
Be Level headed When Making A Decision Whether To Buy or Not
I must admit that when you are in the process of searching for your first home to buy emotions can sometimes overtake reason.
It is very easy to be taken up with new houses and forget important issues such as affordability.
I remember not long ago I was viewing a house that attracted me very much that if it was like buying apples I would have bought it on the spot. However when I went home and reviewed everything I came to the conclusion that this was really not the right house for us.
I would, therefore, advise any first home buyer to plan ahead first and not just be taken up by emotions. Have some sort of checklist and judge houses based on that checklist.
You don’t want to buy a house and later discover that it has some issues that you don’t like about it or the area.
For instance, I prefer a house with enough land for me to plant at least my own vegetables and some fruit trees, etc. Unfortunately, most modern houses cannot afford you that luxury.
You too could have the things that you cannot do without. Remember that this house will be yours for life in most cases. It is therefore important that it meets your expectations.
Find Out More About the Area Before Buying Your First Home
Before you even view houses in an area it is important that you have a good idea about the area and its surrounding areas. It is a waste of time to view a house and later discover that it is a crime-infested area for example.
So please research about the area first.
If you are a parent or plan to be a parent, then it is of vital importance that you find out the quality of the schools in the area. No responsible parent wants to remove his children from a good school to a poor school.
View The House At Different Times of the Day
One of the things that most first time buyers forget to do is to visit the house they are interested in at different times of the day. This will give you a good idea of the neighborhood.
If you are looking for a quiet neighborhood then viewing the house at night can give you an idea of the area. You don’t necessarily have to ask the seller to open it for you if you have already done that during the day.
Visiting the area at different times can also help you make up your mind on the beauty or lack thereof of the area. We all want to live in an area that appeals to our senses too.
Take Pictures When Viewing a House
Almost everyone nowadays has a smartphone so taking pictures should easy peasy. You can then use the photos to compare various properties that you have viewed.
You can use the photos to assess the fittings and other things you have viewed. Another benefit is that you can ask friends to help in making your decision by showing them the photos.
Hire an expert
Sometimes it is a wise idea to hire an expert to help you identify a house to buy. These experts will use their expertise to find the right property for you.
These experts may even have the advantage of finding properties that are yet to be advertised.
They can also use their expertise to find the best area that fits your pocket and needs.
So if you are first time home buyer consider hiring an expert.
Be Extra Careful When Buying An old house
While buying a brand new house is a bit easy due to the standards that some local area authorities demand and enforce. It is however a different proposition when it comes to buying a second-hand house.
If you are buying a second-hand house then it is important that you test everything in the house. You can do this even for the new houses though, in my opinion, it is not always necessary.
You can test for instance the locks to find out if they are working properly.
One can also check all the appliances to see if they are all in good condition.
And if you can afford it it may be advisable to hire a plumber to check all the plumbing works. And an electrician to check all the electrical appliances.
If there are issues you can ask the seller to fix them first to your satisfaction before you commit to buying the house.
If you cannot afford an electrician or a plumber then you can do the checks yourself. For example, you can check the heating by asking the seller to turn on the heat.
You can check the cealing to see if it is in good condition.
One can also check for damp areas. Check the carpet. View the attic for the state of the timber and woodwork.
And you can also inspect the wall for cracks. Check that all the switches are working properly.
Another thing that you can check is your mobile phone reception. You don’t want to live in a house where your phone cannot work.
Check all the doors and windows by opening and closing them to see if they are in good condition.
You can also check the location of the electric sockets and test if they are in working order.
To do this properly I would suggest you have a checklist that you will go through during the inspection.
About Author
