Owning your first home is extremely exciting. It is the first time you are able to call the place you live your own. Everyone gets through life at their own pace, and there isn’t necessarily a particular time you should look to get your first house. Instead, there are some key factors and checklists you should consider before looking to buy your first home.
Do You Have the Money?
The first thing you will need to consider before looking at houses is how much money you have saved up. Generally speaking, you will need between 10–20 percent of the house price to put down. First-time homeowners, however, can sometimes qualify for loans that only require about a 3 percent down payment. So if you are looking into a 250,000 dollar home, you need at the very least to have 7,500 saved up for the down payment.
That is just for the down payment and is not the total amount that you will need to have saved for the house. Closing costs, for example, run about 3 to 6 percent of the home value. So at the very least, you are gong to need 15,000 saved up as a bare minimum. A more realistic amount of money needed for a 250,000 home is 30,000. Aim to have between 10 and 20 percent of your budget home price put away for a down payment and closing cost. Once you have money saved up, you need to find out what your monthly payment will be. Your monthly payment should not exceed 20% of your monthly salary.
Are You Ready to Stay Put?
Buying a home means being prepared to live in that home for the foreseeable future. When you are renting, you have a lot more flexibility. Renting allows you to move around much more freely, and if you get a better job offer across the country, you can probably head there pretty soon. Owning a house is not like this. Your finances will suffer greatly if you move too soon after buying a home, as there are often fees associated with selling within 2 years of purchasing a home.
On top of this, buying a home is a long term plan. Homes appreciate in value over the years, so it’s to your benefit to stay put. Make sure you want to live in that area and that you have a pretty stable job that you can work from that location. If you absolutely needed to leave, you could try renting out your house, but this is a risky strategy. Prepare yourself to stay in the same place for a long time when purchasing a home.
Are You a Handyman?
Owning a home means that you are responsible for fixing any problems that pop up. When you are a renter, you can just tell the landlord or leasing office about a problem, and it is their responsibility to fix the issue. That is not the case when you own the home. At the very least, make sure you know basic home repairs so that you are not constantly having to pay for repair services. You can YouTube pretty much anything nowadays, so if you are decent with your hands this shouldn’t be too much of an issue.
Buying a home is not for everyone, and not all prospective buyers are ready at the same stages in life. But if you have your finances and career in order and are ready to stay in one place for the foreseeable future, you might be ready to take the plunge and find your first home!