Buying your first home
Buying a home is not an investment to jump into without research and planning. A home is a major purchase and should be treated as a life changing event. Most first time home buyers plan on financing their home for 30 years on a conventional loan, 30 years is a large portion of ones life. This is a guide with many helpful suggestions to consider before purchasing your first home.
The first step to buying your first home is thinking about what you want in your home. Make a comprehensive list of things you would like to have in your home and things you don’t want in your home. A great way to do this is visit open houses and take good notes about thing you see. Do you want large bathrooms and closets? Do you want a big kitchen or do you plan on eating out a lot? Is a home office or formal living room necessary? Do you need a two car garage or will one be enough? There are hundreds of other questions to ask when considering your first home.
The second thing to consider is resell value of your home. More than likely your first home will be what’s called a starter home. You will purchase this home with hopes of upgrading or buying a bigger home in the future. Will you be able to make improvements to this home and make a profit from the sell of this home? Is this in a neighborhood that will be desirable when you decide to move? You want to make sure you will have money to pay down on your next home from the sell of your first home.
The next thing to consider is financing options for your first home. If you know you are only going to live in this home for 3 to 5 years you may want to consider using an ARM loan to finance the purchase of your first home. An ARM loan will give you a better interest rate with a fixed rate for a short period of time. When the rate starts to rise you will be ready to sell and move to another home. Getting the best rate possible is very important because you will build equity faster with a lower interest rate.
Finally, make sure you have done a detailed budget for the next few years. If you won’t be able to afford the payment on the home without sacrifice then don’t buy the home. Putting yourself in a financial bind to purchase a home is never a good idea. A home is probably your most important asset so treat it like one.
Great first time home buyers guide. These are some very helpful suggestions. We purchased our first home 3 years ago on a 5 year ARM loan. We’re now ready to move and interest rates are still low. This time we plan to say for a while so we’ll do the 30 year conventional loan.