Buying a home for the first time, whether you’re starting in real estate investing or purchasing a home to live in, involves many more steps than many people realize. It’s an exciting, stressful, complicated process and likely to be one of, if not the most, significant purchase in your lifetime.
When people know you’re getting ready to purchase your first house, you’ll likely get a lot of advice, both solicited and unsolicited. That can make an already complex process even more confusing. That’s why we’ve put together this guide to buying your first house. Keep things as simple as possible by focusing on making your way through these steps, and when things inevitably get stressful, just remind yourself of the feeling you’ll get when you own your first home.
Understand What You Can Afford
It’s easy to browse listings and get excited about all the homes for sale in your area. But before you start searching, it’s essential to understand where your finances are and what they need to be. Some people fail to consider beyond the cost of a house, forgetting that there will be regular expenses, such as taxes, insurance and maintenance.
Determine what the requirements for a down payment are and look at what your options are. Down payments are generally recommended to be at least 20 per cent, meaning you will need a different amount if you’re looking for Ajax houses for sale compared to Toronto.
Know Your Credit Score
In order to get a mortgage for the rest of the cost of a home, you’ll need to know what your credit score is. A credit score is a numerical summary of your credit report and outlines how well you’ve paid off previous debts like loans and credit cards.
Mortgage lenders will use your credit score to help determine whether you’re a good risk or a bad one and what your interest rate will be. Knowing what your credit score is is vital so you can understand what it means before you walk into a meeting.
Consider Your Options
When looking for a house, it’s important to stay open to different options. Being firm on all the features and locations you want can leave you with no options. Take the time to consider what your must-haves are and what features would be nice but aren’t deal-breakers. This will ensure you have more options, and you can edit your list as you begin to look at potential houses.
Look at First Time Buyer Programs
Many places have first-time buyer programs, so it’s essential to look into these to see if you meet the qualifications. These programs can include local or federal programs, tax incentives, or special loans. Take some time to do some research into what programs operate in your area and what you have to have in order to take advantage of them.
