Purchasing a home is a major milestone and when buying a home for the first time the process feels daunting and overwhelming. Even more so as a first-time homebuyer, you will navigate a process that might include uncertainty, excitement, confusion and frustration. That’s why we created this handy guide, which helps explain how to prepare to buy a house. With preparation and knowledge, you can take control of the home buying process.
When you first apply for a home loan, the bank may be willing to lend you more than you need. However, there are a lot of really good arguments in favour of buying less house than you can afford. For instance, a larger house may mean a larger debt, but it doesn’t end there. More space to heat and cool will mean higher utility bills and rates.
Your first step here is to figure out what city or neighbourhood you want to live in. Look for signs of economic vitality: a mixture of young families and older couples, low unemployment and good incomes.
The single most important aspect of purchasing a home is to fully understand the overall home-financing process. Your home will probably be the most expensive purchase you ever make. That’s why it’s important to research every aspect of the home buying process – and make sure you do things right from the start.
Obviously, the less you borrow, the faster you may be able to pay it off. Imagine paying your house off within 15 years and all of the financial freedom that would afford you.
Always inspect the home on your own and pay attention to the details. Asked questions, take notes and always check things out for yourselves.
Review all documents carefully, especially the offer price, closing date and financing information.
Avoid the pitfalls that can put you out on the street. The date of occupancy is a key factor in the purchase of a house, and needs to be spelled out very specifically. The secret is to have no homemade arrangements – that is a recipe for disaster!
Once you find the house you want, move quickly to make your bid. If you really want the house, don't offer an unrealistically low amount. The seller may give up in disgust. Remember, that your leverage depends on the pace of the market.
These costs should be factored in at the start of the financing process so that first time home buyers are comfortable with their down payment and monthly payment and will have money available to make improvements.
Pay special attention to districts with good schools, even if you don't have school-age children. When it comes time to sell, you'll find that a strong school system is a major advantage in helping your home retain or gain value.
As intimidating as it can be, buying your first home is a wonderful, exciting experience — especially if you educate yourself about the process beforehand.