As real estate agent, there is no better experience than helping somebody purchase a home for the first time ever.
As I will explain in little bit, there are a TON of benefits to home ownership. It is the biggest investment that the average person makes in their entire lives. There are plenty of ways that you can use your home not only as a place to live but also as a source of income and security as you grow older.
Owning a home is a huge piece of the American Dream.
But it’s not a simple as it seems. And it’s definitely not as easy as purchasing a car.
It’s a long process that can definitely have its ups and downs.
As you step forward into this process, there are some things that you are going to want to remember.
Here’s 4 Things To Remember When Buying Your First House:
#1- Ownership IS Better Than Renting!
Owning a home is a much better option than renting a place, for more reasons than one.
Firstly, your monthly payment for your mortgage will probably be equal to or less than your monthly rental payment!
So picture that. You will get the full ownership rights to enjoy, use, and renovate the property as you like. And you might be paying even less per month—including principal, interest, taxes, homeowner’s insurance, and HOA/Condo Association fees—than you are currently paying to your landlord.
Secondly, you do have to pay interest to your mortgage lender. But the principal that you put into the house is yours. Each time you make a monthly mortgage payment, your equity—the amount that you have invested in that house—grows. So when you eventually decide to sell your house, you get to walk away from the sale with some money in your pocket as opposed to walking out empty-handed.
And as your investment in your house grows, you will also have the opportunity borrow money from or against the equity built into your house through Home Equity Loans and Reverse Mortgages. So in the event of hard times, you will have a safety net of wealth to fall back on.
Not only that, you will also have the opportunity to rent your house out as opposed to selling it. So instead of liquefying the money invested into the house, you’ll receive monthly income through those rent payments for the rest of your life!
Not to mention, there are tax benefits to home ownership! When tax season rolls around, as a homeowner you’ll be able to deduct your monthly interest payments and property tax payments from your taxes!
How awesome is that?!
That’s a whole new category of tax deductions that you wouldn’t qualify for as a renter.
So the 1st Thing To Remember When Buying Your 1st House is you made the right decision. Because ownership is much better option compared to renting.
#2- This is NOT a Short Process!
One of the toughest parts of the home-buying process for first time buyers is understanding that This Is NOT a Short Process! Unlike buying a car, purchasing a house is not something you can do within a matter of hours—not even within a matter of days.
The process of buying a house takes between 30-45 days.
The main reason for the long duration of the process is because mortgage lenders require that month and a half as a standard period of time needed to prepare and review the documentation for the mortgage. Your lender needs 45 days to make sure they can offer you a full loan approval to buy the house.
Extending the contract-to-close process out to 30 days also makes sense because there are a variety of other things that need to take place before you can move into your new house. A home inspection, a survey, an appraisal need to take place. And you’ll need to order title insurance, order home insurance, and buy a home warranty before the day of settlement.
So it’s not a short process. But it’s better that way!
Because purchasing a house is the biggest investment that the average person will make in their lifetime! So you want to have as much time to prepare for this huge moment as possible.
#3- Make Sure To Get A Home Inspection!
One of the best suggestions that a real estate agent can make to you is Make Sure To Get A Home Inspection.
Home inspections can cost you anywhere from $300 to $600 depending on the size of the property in question. But the potential savings on future repairs and the peace of mind that you will get from having an inspection done make it well worth the money.
So make sure to ask your real estate agent to write in a 7-10-day home inspection contingency into your purchase contract. That contingency will give you about a week to hire a certified home inspector to thoroughly examine every aspect of the house—from the roof; to the gutters; to the attic; to the basement; to the heating, ventilation, and air conditioning; to the water heater; to the kitchen; to the electrical outlets; and the electrical panel. He or she will examine every aspect of the house and write a report detailing anything problems that might need repair.
If there are any defects in the house that are a cause for concern, the contingency will allow you to cancel the purchase without any consequences.
There’s two benefits of getting a home inspection.
If there are any major defects in the house, you will save lots of money by getting the opportunity to get out of the contract. And if there aren’t any major problems or causes for concern, you will at least have the peace of mind of knowing that you are moving into a house that is in good condition.
#4- Don’t Make Any Major Purchases Before Settlement!
And the last Thing To Remember When Buying A House, but definitely not least is Don’t Make Any Major Purchase Before Settlement!
When you first get pre-approved for a mortgage, there are 3 factors that your mortgage lender takes into consideration: your debt-to-income ratio, credit score, and income.
So even after you and your spouse have put the house of your dreams under contract, it’s not time to celebrate just yet. Because there are certain mistakes that you could make in between going under contract and settlement that could seriously hurt your ability to buy the house.
If any of those 3 factors change, you may lose the ability to follow through with the purchase.
So avoid changing or losing your employment. And make sure to avoid any major purchases after you go under contract.
If you purchase anything major like a brand new couch, dining room table, flat-screen TV, laptop computer, or a new car using a credit card, your debt-to-income ratio may get so high that your lender will no longer be able to approve you for a loan.
I know you’re going to be excited to start furniture shopping to decorate your new house. And you might be planning to purchase a new car to go along with beautiful home. But make sure to avoid making any major purchases. When in doubt, give your loan officer a call to make sure that you aren’t ruining your chances of home ownership.
So those are 4 Things To Remember When Buying A House!
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Reach out to me at 240-506-2898 or at Bo@BetterLivingMaryland.com for any help with your real estate needs
Image source: http://www.ms-properties.com/buying-a-home