Tips For First Time Home Buyers

If you are a first time home buyer, it can be quite thrilling. Every new house you walk into is an adventure. Listed here are some tips for you to consider as you search for your first home.

Look At Existing Home Prices

Take a look at some real estate websites to discover the cost of homes selling in your area. Pay special attention to the houses similar in size, and with comparable features, to what you might like to own. This gives you an idea of what you will have to pay. You may also perform a search of available MLS listings in your area as well.

Also, talk with a couple good real estate in your area. They will be able to give their opinion on the housing market and current prices. For example, they may know if prices are stable, rising or falling.

Calculate What You Can Afford

There are a variety of online calculators which can give you a good idea of what you could afford to spend each month. These tools can also help you calculate expenses for other things including insurance and utilities.

To obtain an accurate estimate on insurance costs, it's a good idea to call your insurance agent, or call around if you don't have one. You will not be obligated to buy the insurance coverage at this point, but the information will help you understand what the cost is likely to be for a similar house. At least you will have a good "ballpark" number.

Learn About Closing Costs

When you buy a house, you will likely be taking out a loan. Loans have costs associated with them. You will pay these at closing, that is when the loan is finalized and you own the house. 

These closing costs include the origination charges which is billed from your lender. There are also settlement and title fees and property taxes to consider. It can be possible to roll these charges into the total loan, but then your monthly fees will increase.

Also keep in mind the cost of homeowner's insurance and even association fees if the neighborhood requires it. These all play into your total cost and might be due at closing.

Understand Your Own Budget

Work through all of your monthly income and expenses to see how a house and all of its related expenses are going to fit. A good rule-of-thumb is that your housing costs should not exceed 28% of your monthly earnings. Of course this depends on what other expenses you have. Students loans, car loans, and credit card debt can make it more difficult to get a house unless your income overcomes those issues.

Consider Other Places To Live

When you ask a real estate agent about the local housing market and prices, also ask if there are other nearby locations that you should consider. It is usually smart to keep your options open.

Perhaps very close to, but outside the area you are initially considering as a good place to live, there could be houses selling for thousands of dollars less. By accepting a 10-minute extra daily drive-time, you could save $10,000 or more.

Think About The Big Picture

Purchasing a home is definitely an good investment, as long as you can afford to keep it maintained in good shape. Maintaining a house isn't just pricey, but can also be labor-intensive. Initially, you may have to buy new appliances and furniture. You might have plumbing repairs, and there is always the possibility of needed a new roof, furnace, or air conditioner. These kinds of expenses can rapidly drain your bank account if you aren’t ready for them.

Then there are the time-sucking aspects of home-ownership. For example, you have to take care of your lawn and landscaping. And there's regular housework to keep the inside looking good and working properly. These are necessary when you own your own house.

Owning your first home can be both exciting and frightening. You will have many responsibilities, and there are certainly many things to consider. However, if you start with some good research and take the time you need to think about all risks and costs involved, it will most likely be worthwhile.