Your home is where your life happens. It’s the place where you’ll bring your babies home for the first time and create countless memories. It’s where you snuggle with your cat after a hard day at work and binge watch This is Us. It’s your gathering place with the guys to yell at the flat screen TV during the big game. It’s also probably the most expensive purchase you’ll ever make, so it’s not a purchase that should be considered lightly. Here are three important questions to ask for a first time home buyer:
What is My First Time Home Buyer Budget?
Source: CSS Heaven
As a first time home buyer, it may seem difficult to know where to start. However, if you figure out your budget in the beginning of this process, all the other decisions will fall into place more easily. Knowing how much you can afford will dictate where you can live, the house and lot size that you can get, if you should buy a fixer upper or a new build, and more. Here’s a simple way to determine what you can afford:
- Grab your pay stub from your employer and look at what your monthly income is after taxes have been taken out.
- List what expenses you have to pay for every month such as your groceries, gas, cell phone bills, clothing, etc.
- Next estimate the costs that will be added to your bills when you own a home such as water, cable, garbage pickup, electric, maintenance, etc.
- Will any costs go down when you move (like if you move closer to work and can decrease auto expenses)? Remove these expenses from the total number.
- After you’ve calculated all of the above, how much do you have left? This can give you a rough estimate towards how much you can afford for your monthly house payment. But don’t become house poor by putting all of this money into your house. You also need to think about your mortgage interest rate, property taxes, potential HOA fees, and the extras and unexpected events that will inevitably come up. For example, do you still want to take that vacation to Disneyland every summer? Will you be able to pay for little Johnny’s medical bills if he breaks his arm during soccer practice? What will happen if you get laid off of your job for a few months? Be sure to set aside some money for the unknown.
- Check out mortgage calculators like this one from Investopedia to help you get a better understanding of how much money you’ll need for a down payment, how mortgage rates affect your monthly payments, if you’ll need a 20 or 30 year mortgage, and what price home you can afford.
First time homeowners should also check their credit scores, budget for closing costs (which run about 2-5% of your loan amount), and see if there are any assistance programs or incentives for the area you wish to move to. For instance, there are VA home loans that offer lower interest rates for veterans and certain cities have incentives for teachers, firefighters or police officers to serve in their communities.
The final thing first time home buyers need to budget for is moving supplies. You’ll need at least a moving truck, packing supplies and cleaning products to settle into your new home. Keep these costs in mind and remember that the cost of moving can be much larger than you originally anticipated (if you’re looking for a cheaper moving solution, you can always try Dolly!).
What are my “Wants” and my “Must-Haves”?
Source: Dan’s Papers
Who doesn’t want a chef’s kitchen, heated pool with waterfall, and remodeled bathrooms that make you feel like you’re at a spa? Unfortunately, our expectations don’t always align with reality. Many realtors will ask you to create a list of your must-haves and your wants. Maybe you must have three bedrooms, two baths and a commute to work that is less than a hour. Your wants may include an additional bedroom and bathroom, a 10,000 square foot lot, and a move-in ready home.
One question to ask a realtor when buying your first home is, “how realistic are my must-haves?” They may tell you that, as a first time home buyer, you can have everything on your must-haves and your wants list, but you have to move farther away from your ideal neighborhood. Or possibly you can live closer to work and have everything on your want list but you’ll need to save an additional $50,000 for your down payment. Knowing what you want, need and where you can compromise will help to refine your options and guide your realtor towards finding the perfect home for you.
Look at the Big Picture
Source: HNW
If you’ve ever watched an episode of House Hunters or Property Brothers on HGTV, then you’ve undoubtedly heard first time home buyers complain about the paint color in a family room or the wallpaper in a bathroom. These are simple fixes that cost a couple hundred bucks and some elbow grease. Look at the big picture: is the house made well? Does the floor plan flow? Do you like the neighborhood? Is it in a good school district?
Think about the things that you can change versus the things you can’t. You can change the paint color and decor over time (if you buy a great house, you can fix it up as time and budget allow), but you can’t change the neighborhood, commute time or school district.
When you’ve found that perfect house and you’re ready to move, book a Dolly. Our Helpers can make moving a breeze so that you can transition easily from your old home into your new one. You won’t need to worry about finding a moving truck or calling in favors to get your friends to help. We do all the hard work for you so that you can start making your new house into your beautiful home.
Dolly helps you move on your schedule and at an affordable price. Book now and see the difference: https://dolly.com.
