When you’re first starting out, buying a house can seem like an overwhelming prospect. You don’t know where to start, you don’t know what you’re dealing with, and you have no idea where you’ll be six months from now. It can be scary to even think about facing all of the big questions involved in buying a home. Fortunately, there are plenty of resources out there to make the process easier for you. Whether you’re a first-time homebuyer or you’re looking to upgrade your current abode, this guide is going to walk you through everything you need to know before you buy. Keep reading to discover exactly what you need to know before buying a house, how much you’ll need to save for a down payment, and more.
Know What You’re Looking For
First, you’ll want to decide exactly what type of house you want to buy. As a first-time homebuyer, you might be tempted to buy a brand new house. However, if you’re on a budget, you could opt for something less expensive. You could even look into buying a foreclosure or a house left behind by the previous owners.
Once you know what type of house you’re interested in, you’ll need to look into the details. This will include looking at the floor plan, checking how long it’s been on the market, and seeing what other homes are nearby. You’ll also want to look into home appraisals, getting estimates for home renovations, and figuring out how much home insurance to get.
Decide How Much You Can Afford
When you’re deciding how much you can afford, you’ll want to keep three things in mind. The first is that a house is a large investment. Even if you can afford to buy a house with a low down payment, you’ll still have a large monthly mortgage payment. This will add up over time, especially if you have to pay for upkeep.
The second thing to keep in mind is that a house is a long-term investment. This means that even if you can afford to buy a house with a low down payment, you’ll still be saving for years before you can sell it for any significant profit. You’ll want to keep this in mind as you decide how much you can afford to invest in a house.
Set a Realistic Budget
When you’re first starting to buy a house, it can be tempting to set an unrealistic budget. After all, you want to be able to put down a large down payment so you can buy the house with as little money down as possible. However, you’ll want to keep in mind that a house is an expensive purchase. This is particularly true if you’re buying a larger home. A $400,000 house might only require a down payment as low as $10,000, but you’ll still be spending $400,000 on it.
You need to set a realistic budget that takes all of this into consideration. You can do this by calculating how much money you can realistically put away every month. If you do this, you’ll see that even though buying a house is an expensive proposition, it’s doable with the right budget.
Know Where to Start
If you’re a first-time homebuyer, you might be tempted to start looking at houses right away. However, you’ll want to hold off on this for two reasons.
First, if you’re looking at homes in an area you’re unfamiliar with, you might want to start with homes that are in your price range and neighborhood. This will help you get your bearings and familiarize yourself with the area before you start looking at more expensive areas.
Second, you’ll want to hold off on looking at homes that are more than 30 minutes away. Even if you have a car and can drive to more distant houses, you don’t want to take a first trip to the house in question only to find out that you don’t like the location or the look of the house.
Get Preapproved for a Mortgage
When you’re ready to start looking at houses, your first step should be to get preapproved for a mortgage. This will help you figure out how much house you can buy and where you can find a lender who will approve your loan application.
To get preapproved for a mortgage, you’ll need to submit a mortgage application to a lender. You can do this online at websites like LendingTree. You’ll need to fill out the application, including information like your income and employment information, debts you’re willing to accept, and other financial information.
Once you’ve submitted the application, you can start looking for lenders who will approve you for a mortgage. You can do this by looking through online listings, contacting local banks and credit unions, and speaking with lenders you find through referrals.
Figure Out How Much You Can Borrow
Once you’ve found a lender who will approve your loan application, the next step is to figure out how much you can borrow. You do this by looking at how much house you can afford, and then working backwards.
First, determine how much house you can afford. To do this, take your budget and subtract the down payment you plan to make. In this case, your budget should be left with enough money to cover monthly mortgage payments, insurance, and other associated expenses.
Now, take how much you can borrow and subtract the amount you plan to contribute towards the down payment. This will give you the maximum amount you can borrow.
Look Into Homeowners Insurance
Once you know how much house you can buy, you’ll need to look into homeowners insurance. This is because houses are expensive and accidents do happen. Everybody’s house burns down once every five years, and somebody gets shot every other day. Nobody’s perfect, and accidents do happen.
Homeowners insurance protects you and your property against these kinds of unfortunate events. It won’t, however, protect you against things like roof leaks or termite damage. Make sure you have a separate policy for these kinds of things.
Learn About the Different Types of Houses
Once you’ve got a good idea of how much house you can buy, you’ll want to start looking into different types of houses. This will give you an idea of what you’re getting yourself into and how much you can expect to spend each month.
There are many different types of houses, and they come in many different styles. You can buy a contemporary, transitional, or traditional house. You can even buy a house that was built in the 1800s. There are also houses that were built on the beach or those that were built for maximum views.
You can also choose from single-family houses, townhouses, condos, and apartments. These vary in price, square footage, location, and other factors. Once you know what type of house you want, you can start looking into different models. This might give you some inspiration and help you figure out what you like and dislike.
Wrapping Up: The Bottom Line
Buying a house is an important financial decision that can affect your entire life. Your budget, your lifestyle, and your neighborhood will all be impacted by where you live.
That’s why it’s important to do your research and make sure you know what you’re getting yourself into. This includes learning about different types of houses, how much you can afford, and how much you can borrow.
Once you have a good idea of what you’re working with, you can start looking for houses that meet your needs and your budget. The sooner you start, the sooner you can start living the homeownership dream.