Buying a house can feel complicated, chaotic and stressful. This is especially true if it’s your first time. The best thing you can do is arm yourself with knowledge as you embark on the journey toward homeownership. In this article, we will discuss First Time Buyer? 5 Questions to Ask Yourself.
About 26 percent of buyers were first-timers in January this year, according to the National Association of Realtors. A year prior, the first time buyer market accounted for some 30 percent of buyers.
There’s a lot you need to consider before buying your first house. For starters, ask yourself these five questions.
1. Can you afford it?
This is a question that frequently plagues potential first time buyers. You’ll need to take a close look at your income versus the expenses that will come with buying and owning a house. When you buy, you’ll need a down payment, usually at least 5 percent of the home price. You’ll also need to pay for closing costs, which normally amount to 2 to 5 percent of the price of the house. Then you’ll need to determine how much of a monthly payment you can afford. Don’t forget to include homeowners insurance, home maintenance and repair costs and utilities.
2. Is your credit in good standing?
In order to get a loan, you’ll need to have at least a decent credit history. Before you go out looking at houses, it’s wise to get preapproved for a loan. Once you approach a lender, your income, debts and credit history will be evaluated. The lender will tell you if you’re approved for a loan, how much you’ll be approved for and the interest rate of the loan. Typically, the better your credit history, the lower your interest rate will be.
3. Have you found a real estate agent?
One of the best things you can do for yourself as a first time buyer is to enlist the services of a real estate agent. Buying a home is like walking through a huge maze with your eyes closed. A real estate agent is experienced in negotiation, the closing process, marketing, home inspections and finding homes that mirror your family’s needs. Agents are also very familiar with neighborhoods, schools, amenities and the market in general.
4. Can you commit?
Once you buy a house, you’ll be tied down to a monthly mortgage, the neighborhood and all the responsibilities of owning a home. You can’t call a landlord when the roof leaks or the plumbing backs up. Are you ready for a long-term commitment?
5. Do you know what you want?
When you get ready to buy your first house, you’ll want to narrow down the neighborhoods and determine the type of house you need for your family. How many bedrooms? A large backyard? A media room or loft? A home office? An open floor plan?
Once you’re able to answer yes to these five questions, you’ll be ready to take the next step and ultimately become a homeowner.
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