Are you dreaming of the day when you will finally hold in your hand the keys to your very own home? Homeownership is a huge, sometimes scary, step in life. The list of details to consider is endless: What’s a fair price? Can you trust the inspection? Will the area feel like home? Threads staffers have come up with a list of 12 things you absolutely must consider before you drop such a huge chunk of change on a home that you very well could be paying on for the next thirty years.
- Buy a hose. There’s a ton of stuff that you never think about needing for a house. Like blinds. Or pictures. Or a vacuum cleaner. Or a lawn mower. Or a hose. So be sure to figure those things into your budget.
- Borrow way less than the bank says you can afford. Often you get approved for more than you know you have to spend. Be wise, and don’t gamble with one of the most important investments you’ll ever make.
- Check out the school district. Even though you may not have kids, may not desire to have kids or to school them, a strong school district will help the resale of your first house.
- Hire the best home inspector in town before you buy. Ask around—they have reputations. You want to use the person sellers fear when they find out that inspector is coming to inspect the house they’re selling. It may be a bit pricey now, but you’ll save exponentially in the long run.
- Ignore simple fixes. Look beyond an ugly paint color or the ’70s chandelier in the dining room. These are affordable fixes you can make once you move in. Pay more attention to the layout and structure of the house, the things you can’t change easily.
- Make sure you can afford it. Budget, budget, budget. Extremely tight budgets lead to stress and unhappiness. You’ll be happier in a slightly smaller house with plenty of money left over every month than in a larger house that forces you to cut corners in other areas to pay for it.
- Locate an excellent real estate agent. You need someone who has a vast knowledge of buying and selling homes, especially if you are clueless.
- Be sure to evaluate whether home ownership is the right option for you. Many say renting is simply “throwing money away,” but if you don’t have a stable income, job security, and contentment, then dropping $175,000 on a home could be an example of “throwing money away” with even larger implications.
- Take your time. Just because there’s a house for sale in your price range doesn’t mean it’s the house for you. You’ll know when it’s “the one.”
- Save lots of $$. Most home purchases require a minimum of 5 percent for closing costs and other loan-related fees. Plus, you’ll pay a lot less interest and have lower monthly payments if you can make your down payment anywhere close to the standard 20 percent. And don’t forget, once you’re in the house, you’ll need a savings pad for emergency fixes, like a busted water pipe or HVAC unit that quits working.
- Do your research. On everything from rate type and length, points, mortgage insurance, title insurance, escrows, appraisals, etc. Being well informed will help you make good decisions on the best loan for you. Check out some online guides at http://realestate.yahoo.com/loans/guides.
- Pretend you live there. Try to picture yourself living in the different rooms of the home, being a part of the neighborhood, playing in the yard, walking the block, commuting to work, and so on.