When people dream of their future goals, they typically dream of four things: a decent job, making sufficient money, a wonderful family, and a dream home. Even with the instability of the economy, many people are still determined to become homeowners. There are several steps prospective homeowners can take in order to make sure they are ready to make that life-altering decision. Buying a first home can seem very intimidating at first. Not only are you putting down a giant chunk of savings in a down payment, but you are also going to require a large mortgage loan as well. There are many benefits to purchasing a home. The high sticker price of a house may seem overwhelming, but as long as first time home buyers strive to stay financially secure, buying a home will be a smart purchase for the future. Here are a few tips for first time home buyers.
1. Do Your Homework – It is important for potential homeowners to do their homework before purchasing a house. There is much more to buying a house than simply paying a down payment and a monthly mortgage. There are taxes, fees, insurance costs, and standard upkeep costs that can be easily overlooked. Homeowners need to make sure they are financially secure and able to afford all of the costs and fees that go into buying a house. Credit scores and history are taken into consideration by mortgage companies as well.
2. Timing is Everything – In real estate, the market can either favour the homebuyer or the home seller. For first time homebuyers on a budget, it is wise to wait for a buyer’s market. However, this is not always possible due to the uncertainty of future markets. If waiting for a buyer’s market isn’t a possibility, the better approach is to buy only when you can afford to do so. If it isn’t fiscally responsible enough to go through with home purchasing, perhaps your best bet is to look into renting.
3. Do It Yourself – Once the house is purchased and general upkeep begins, homeowners can continue to improve financial stability by improving their amenities through do-it-yourself renovations and remodeling. The overall cost of upkeep on a house should be an important factor in determining if you are financially ready to become a homeowner. In the end, these simple projects can save homeowners bundles of cash, which can then be invested back into the house.
4. Be Aware of Tax Deductions – Down payments, mortgage rates, property taxes… they can all seem overwhelming. However, it is important to keep in mind that there are several tax benefits for homeowners. For example, you can deduct state property taxes as long as they are based on the assessed value of the property. It is a good idea for homeowners to keep a record of the bills they pay toward property taxes. This is a major expense and the portion you have to pay is deductible.
5. Beware of Warning Signs – An important step before purchasing is to have a full inspection of the home. This step can be expensive. However, there are several warning signs homeowners should keep an eye out for while they are searching for their dream home. When checking out the basement and the exterior of the house, buyers should take note of any sloping, bowing, or slanting in the ground and yard. Another example is if there are water stains on the ceiling. This is clear evidence that something may be leaking and causing water damage. This is a potential red flag for expensive bathroom plumbing issues.