Are you feeling overwhelmed by the prospect of purchasing your first house? With the right mindset and a little planning, buying a new home will not only be manageable but will leave you optimistic about your future. Laying out and following a general road map will get and keep you on the right track. Here are some suggestions to consider as you get going with the process:
Daring to Dream
Start your home purchase adventure by dreaming about the future. Where do you see yourself and your loved ones living? What are your needs? For many, a newer model home in a family-friendly area may be just the fit. Others who have the design bug may be looking for that 1850s or 1920s home that is destined to be renovated to its former glory.
If you’re looking for modern and don’t want to deal with the hassle that comes with the upkeep that older homes require, new construction could be right for you. Take pen to paper, outline what you want and need, and that will give you an idea of what kind of dream home you are looking for. When you begin the home search, you will be thankful to have a nice little checklist.
Setting Limits
Sometimes our dreams are bigger than our bank account, and that is why it’s important to rein in your dreams by looking at realistic numbers. Sure, you might get a loan to cover those big dreams, but you don’t want to live under the burden of a heavy monthly mortgage payment that leaves you feeling stressed every month.
If you will be getting a home that needs some TLC, then factor any potential remodeling costs into your price range. There are apps designed specifically to help with renovation budgeting, so do some playing around when you find serious candidates.
Ready to build from scratch? HomeAdvisor notes that new home construction will cost you anywhere from $165,961 to $474,252. If you choose to customize the home, that range will expand to anywhere from $350,000 to $1,500,000. Some factors that will increase the price are:
- Number of stories
- Size
- Excavation
- Design features
- Shape
Choosing the Right Loan
If this is not your first house then you may be able to sell your current home for a profit and put that toward the cost of your next home. If you experience a loss or break even, or if this is your first home, then you will likely need to save for a down payment. Conventional mortgages require anywhere from 3% to a 20% down payment. If you are able to put down 20%, you can avoid the cost of mortgage insurance.
A conventional loan will also give you the option of choosing an adjustable-rate loan (perfect for those who see themselves in the house for a short period of time) or a fixed-rate loan (good for those looking for a forever home and a steady payment).
Building Your Team
As Forbes explains, choosing the right real estate agent will save you from confusion and stress. The right agent in your corner will be able to guide you in some of the following areas:
- Choosing the right location.
- Weeding out unworthy homes or those beyond your budget.
- Setting appointments to view the home.
- Negotiating a contract and price.
- Explaining complicated legal and real estate terms.
- Communicating with the seller and the seller’s real estate agent.
- Walking you through a home inspection and appraisal.
- Navigating closing matters.
Sometimes it’s best to add an attorney to your team as well, and some locations require one. If you hire an attorney, expect to pay between $100 and $200 in a rural location and double that in more urban areas.
The home buying process can go smoothly if you prepare. If you know what you are looking for, plan your budget, determine the right loan for you, and find the right agent to be on your side, then the rest will flow naturally. In no time at all, you will find that your dream has become a reality.
Image via Rawpixel
