While most of us dream about owning a home, the process of buying a house is in no way a small endeavor. It is not something that can happen overnight and there are many factors that play a role here. To help you on your journey, we created this useful guide that can lead you through the basic steps of purchasing your first home.
Decide whether you are ready to buy a home
The first and most important step is determining whether you are ready to do this. You need to understand that owning a home comes with a lot of expenses, from paying the bills, taxes, and insurance to taking care of all the repairs. Before you make this decision, you should ensure you are in a good situation when it comes to your finances. In case you have any outstanding debt, deal with it first so that you can start this new venture in peace. On the other hand, if you feel like you are not financially prepared, you might want to consider the option of renting for the time being.
Look into your financing options
After you’ve definitely decided that buying a home is the way to go, you should look into your financing options. Luckily for you, there are plenty of approaches you can opt for. For starters, you can ask your parents to help you out. This way, you might not have to pay any interest and you might have more time to pay off the debt. On the other hand, if you are like most young people, you probably want to purchase your first home without your parents’ help. In that case, you can turn to online lenders that might present you with affordable conditions. Alternatively, you can also go down the traditional path and turn to banks. Set up a few meetings to see what they can offer you and if you can agree on the terms, great!
Be aware of what you can afford
Sure, dreaming big is great; however, you don’t want to find yourself in a situation where you overestimate your abilities and end up way over your head in debt. This is why it is vital to know what you can actually afford. If you’re looking into loans, make sure you can meet the monthly payments and still have enough money to keep the house running. You do not want to risk becoming house poor. Keep in mind that you also need to have financial reserves for unplanned issues. All of these factors should help you realize whether you can purchase the house you want and if you should look into some smaller, more affordable options.
Start your search
Once your finances and expectations are in order, you can finally start the search for your dream home. You can look online and see what kinds of homes are on the market. However, hiring a realtor is probably for the best, as they will take into account all your needs and wants and look for the house that suits you. They can also help you understand the market and present you with several options that meet your requirements. To find a professional realtor, ask your friends and colleagues for a recommendation and look through their online reviews.
Conduct a thorough home inspection
A good realtor will probably organize a couple of viewings to see whether you like any of the houses. When you visit a house, make sure to go through everything to see if it meets your criteria. Does it have enough bedrooms? Is the backyard big enough? Can it accommodate your lifestyle? All of this is important, but it’s only a start. After making sure you like the house, you should have various professionals thoroughly inspect it. Have them check whether there are any foundation or roof problems. Other issues include mold, termites, bad electrical wiring and plumbing, among other things.
Close the deal
Finally, before you can move in, paperwork needs to be dealt with. The escrow process might take a while, but it is there to protect everyone involved. In any case, make sure to have a professional on your side when reading through the contract and signing it. Keep in mind that you will have to pay for closing costs as well, so start saving up on time. Furthermore, make sure to look into your insurance options well before you sign the contract.
After these six steps, you will be ready to move in. The process of purchasing a home can be tedious and slow but in the end, it is all worth it. Happy hunting!