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The dream of owning a home is something that still motivates many Americans. Owning your own home isn’t simply about having somewhere to live for as long as you want, it is also about making what could be a profitable investment in your family’s future.
And even though younger generations of Americans have seemed more reluctant than their parents or grandparents to join the ranks of homeowners, studies have shown that the vast majority of millennials still expect to own their own home at some point in their life.
But for those who are embarking on home ownership for the first time, the process of finding and buying a first home can be intimidating. Here are some key things to remember if you are thinking of taking the plunge and becoming a homeowner.
Financial Self-Assessment
The starting point to the home-buying process is to make sure that your finances are as strong as they can be. To start with, take the time to run a credit report on yourself, and analyze the results. Doing what you can to improve your credit rating, such as paying off credit card balances, can help when it comes to taking out a mortgage, and if your credit rating is likely to take a few months to improve, then it is worth taking this time out before beginning the house buying process.
Prepare Financially
Once you’ve done a little financial housekeeping, the next step is to assess how much money you can afford to spend on a house. This includes the level of deposit you will be able to afford, and the approximate amount you will be able to pay in mortgage payments, taxes, interest and insurance, along with an allowance for future maintenance costs.
Home Inspection Costs
Another expense that you should prepare for is the cost of the home inspection. There are plenty of resources online to help you find out more about home inspections, but essentially this is a report that you have to carry out later on in the process, after you have found a home and made an offer. Some home buyers make the mistake of overlooking this home inspection cost early on and may not have funds available to compete the inspection report, so make sure you put money aside at the start.
Realtors and Mortgages
The next stage is to find a real estate agent that you feel you can work with as you start your home search. A good agent will not only work with you throughout the process, they will also help you to get in touch with the different specialists, including financial advisors and home inspectors, whose help you will need to buy your property. And it is a good idea to go through your mortgage options with a financial advisor at an early stage. A key aspect of choosing the right mortgage is to work out how much money you have to put down as a deposit, but beyond this factor, there are many types of mortgages from conventional loans to FHA loans and VA loans, and a good financial adviser will take into account your circumstances and financial history to help you find the right one.
Starting Your Search
Whether your agent is sending you potential properties, or you are doing the searching yourself, start by narrowing down the areas in which you would like to live. If you are unable to find anything suitable within that area, be prepared to expand it. Then it is simply a matter of taking the time to visit the homes you are interested in, asking as many questions as you can think of and being prepared to make further visits as required, until you have found the best home for you.
Securing Your Home
Making an offer and having it accepted is only the start of confirming the purchase. There will still be many weeks and a lot of paperwork to get through, including the home inspection report mentioned earlier, before you are able to sign contracts. Don’t forget to put some money aside to cover additional closing costs, which can often amount to as much as five percent of the sale price. You will also usually have a final chance to look around the place before you move in, to make sure that there have not been any significant changes since you made your offer. And with all that complete, you are ready to take ownership of your new home!
Buying your first home can be a stressful process, but by making sure that you plan thoroughly and leave as little as possible to chance, you can keep the stress to a minimum and achieve your dream of home ownership as quickly and smoothly as possible.
