Buying your first home can seem like a daunting process. From mortgage rates to taxes to closing costs, there’s certainly a lot to consider. And because your new home will likely be the biggest investment of your life, it’s crucial that you educate yourself about the process before you get started.
The more you know about the homebuying process, the more likely you’ll be to get the home of your dreams at a price you can afford. That’s why we’ve put together these six tips for helping you achieve your goal of homeownership.
1) Know what you want
When purchasing a residential property, you’ll have several options to consider. These include traditional single-family homes, condos, townhouses, and more. Each type of property has its benefits and drawbacks, so before you move forward in the homebuying process, make sure you pin down which property type will best suit your needs.
2) Know where you want
Just like properties have their pros and cons, so do neighborhoods. Before you start checking out homes, decide where you want to live and focus your efforts on that area.
3) Do your research
Get online and check the selling prices of comparable properties in the area you’re interested in. You can also ask your Realtor to send you a list of sold properties within the past 6 months.
4) FInd out what you can afford
Use an online mortgage calculator to see what your monthly mortgage payments would be if you bought a home today.
5) Look at total monthly costs
Mortgage payments are only part of equation. Before you buy, you’ll want to figure out what your total monthly housing cost will be, including homeowner’s insurance and taxes. To get an idea of insurance costs, pick a property, then call a local insurance agent and ask for an estimate.
6) Figure out closing costs
It’s important not to overlook the upfront cost of settling on your home. Closing costs include lender origination fees, taxes, title and settlement fees, as well as prepaid items like homeowner association fees and insurance.