So, you think you’ve found your ideal home? Before taking the homeownership plunge, it is important to take precautionary steps to make sure that the house you've chosen is the right fit for you. Ask yourself the three questions below, they can help you avoid unnecessary mistakes that could cost you thousands of dollars.
Just because you may qualify for the loan doesn’t mean that you can make the monthly payment. The rule of thumb is that first-time homebuyers shouldn't spend more than 30 percent of their gross income on housing, according to HUD. Review your other expenses and really determine how much money you can comfortably spend on your monthly mortgage payment. Remember to account for other expenses, such as student loan payments, car payments, credit card bills, health insurance, and groceries, Your utility bills could also increase due to a move into a bigger place; plus, incidental costs can come up with houses for which you may not be ready. The bottom line? It's important to avoid spending every penny you have on the mortgage so that you can save.
Before making the biggest purchase in your life, wouldn’t you want a professional to alert you of any issues? After all, you wouldn’t want to buy a defective product, right? A professional can look at every inch of the house, including areas you wouldn’t even have thought to look. Having a professional assess the home’s condition is essential and can save you from having to pay to fix a hidden issue down the road. You may be able to request that any issues that come up through the home inspection be fixed by the seller before settlement, depending on your contract.
Planning for the next few years is easy, but what about even longer than that? Think about what you may need in five, 10 or even 20 years from now. Do you intend to raise kids in this house? If so, is there enough room in the house and reputable schools in the area? Is the home’s value likely to increase or decline in the future? Assess what your future goals are and if this house reflects those goals. The length of time you plan to call this place home directly affects which mortgage is right for you. Choosing the wrong one can cost you quite a lot of money. Talk to your mortgage banker about which loan type best fits your plan.
First, keep in mind that it's common for first-time homebuyers feel overwhelmed. There's just so much new information to get your arms around. Get yourself comfortable with homebuying by asking questions like the ones above. The answers can help you avoid mistakes. Most importantly, remember that you don't need to do this alone! Leverage the experience of professionals that navigate the homebuying process everyday. Apex Home Loans is here for you! Read our Guide to Happy Homebuying and Contact us with all of your homebuying questions and home loan needs.