Renters everywhere dream of moving into their first home and calling it their own. Renting can be a fantastic way to keep overall costs down, especially when saving for a big purchase—like your first home. However, long term, there’s nothing like your own property that you can change and mold to your own designs.
Making the move requires some foresight, however. Building up great credit, saving up for the down payment, and making sure that you can afford monthly mortgage payments are all essential when considering your first home. They’ll also reduce the interest rate you can expect to pay, saving you money in the long run if you have the ability to begin your search months or years before you put in an offer on a property. Unfortunately, first-time homebuyers often discount the importance of these preliminary steps and jump right in.
As a first home buyer, you cannot overestimate the importance of strong financial foundations. High creditworthiness will smooth the path of your mortgage application and make for a far more pleasant buying experience, so beginning to set aside cash every month for the down payment is crucial as early on as you can.
To put it bluntly, the more cash you can put up immediately, the more you will save in interest and energy later on. As well, the less you will need to worry about foreclosure or repossession.
Another avenue that buyers seeking their first home are going down is purchasing to rent out the property rather than moving in themselves. If you are thinking of adding a revenue stream to your income through property ownership then you may have already built a firm grasp of the financial suitability of a buyer in the eyes of their bank.
You’ll certainly want to look into debt collection options yourself in the event of a non-paying tenant (see globallegallawfirm.com for much more information on this). In truth, buying in order to rent the property out for a year or two while you continue your own tenancy is a great way to chew away at the overall mortgage bill that’s owed on the property. By buying a property that you can rent out for more than your monthly payments, you can even save a little on your own rental debts, providing a shot in the arm for your cash flow in the process of building equity in your newly acquired property.
Buying a home takes more than a strong financial history and a great credit score. It requires an extensive search for that right property that ticks all your boxes while falling within your price range. As a first time buyer, it’s important to really think about the things you need in a home: Maybe it’s walking distance to the local primary school; maybe you need to be within a few miles of your parents’ house, or maybe you are looking for a spacious kitchen with a large island in the center.
Whatever your needs, make sure you seek out properties that match your description. There’s little point in looking at homes far beyond your price range, or ones that you are unhappy with. Take the time to uncover your five or so most important attributes—both positive inclusions, and negative exclusions—and then meet with a real estate agent to discuss options that fit your budget and requirements. Home buying can be a long and nerve-wracking task, utilizing professional help and thinking thoroughly about what you want ahead of time can minimize the headache that can come along with the search process.
Making the switch from renting to owning is an exciting time for everyone, but it can be a stressful transition. Make sure you account for each step along the way in order to streamline the process.