The 3 commandments of home buying tips for first time buyers
1.set your budget
Most young couples that set out house hunting are in the prime of their lives.If this is your first house you would be too.Real Estate agents often show customers some of the best homes they have, and first time buyers are often enamored by the idea of owning a beautiful big house.They think they can take a larger mortgage and by some means pull through.This of course is the worst idea ever.It maybe disappointing not buying your dream house because it costs $50,000 more,but in the long run you will be thankful.Setting a modest and realistic budget is of prime importance before you set out on your home adventure.In the event of job loss,medical expenses or unforeseen events,paying back that mortgage should be hassle-free.
Most home shoppers only worry about the costs that come up before buying a house,but forget about costs that will be incurred after the purchase has been completed.These include annual insurance,property taxes and maintenance costs.These are in addition to you monthly payments towards your mortgage,which by itself is a huge cut out of your pocket as it is.So taking a grand total including mortgage payments as well as taxes,insurance and maintenance should give you a better picture of what you will be going in for.Owning a house is no laughing matter.
3.dont marry your mortgage
This is probably the most important financial decision you will have to make while buying your house.Take sometime before deciding whom you want to get your mortgage from.Just as you went house hunting and then finally closed in on one particular house,the same way, take quotes from different lenders including a full list of fees and other costs that you will be liable to pay.Look out for two important aspects of low closing costs and lower interest rates.Remember a 30 year mortgage is almost a lifetime,let it not make your life uncomfortable.The monthly payments towards the mortgage should be very easy on your finances and should ideally be easy enough even for a single income in the family to handle.As far as interest rates are concerned,its a simple calculation, he lower the interest rate, the faster your principal balance will be reduced.Keep your mortgage tenure as short as possible, dont let it plague you for a lifetime,because if things get tough, you cannot simply divorce it.
jerry vaz is a personal finance columnist at Dollardement a website that fetaures advice on Loans and Credit Cards