Take a deep breath – you’re buying your first home.
Maybe you can no longer handle your noisy neighbors. Perhaps you have simmering desire for your own space at last. Whatever your reason, finally deciding to buy your first home can be exciting – and daunting! Haven’t you heard the stories from friends, families, or co-workers about those bidding wars and confusing mortgages? And what about the agony of saving up for a down payment? Don’t forget about those legal documents, financial documents, and the calculations either. It’s enough to drive anyone mad!
But hold the phone – you’ve got friends at Shamrock Financial. We have helped plenty of people over plenty of years to finance the right home. That includes many first time buyers too. So if you are looking for the ins and outs of being a first time buyer, here is what you should keep in mind:
Bills and payments and expenses – oh my!
Renting comes with its fair share of bills: rent, groceries, and some utilities. But there are other expenses that only come with being a first time buyer. All utilities, property taxes, and the costs of buying those items you need to maintain your home. Think snow shovels and a lawn mower.
Now, if your home needs a little TLC, then add in costs for paint, rugs, or maybe even contractors to do the professional work.
Wait – there’s more. You actually have to close the transaction. This means legal fees, appraisals, home inspection, and the biggie – the down payment.
Do you think you’re done? Nope! You haven’t moved into your home yet! Include costs for moving boxes, movers, or if you are doing it yourself, a truck plus pizza for your friends who are helping. Owning your first home comes with expenses – a lot of expenses – that you need to budget for before you start your home shopping. Shamrock Financial can give you an exhaustive list of potential costs to make everything easier from the get go.
Shop for a mortgage first. Like, right now.
Picture it: you find the sweetest house in a location that is great for commuting. But no one is willing to give you a mortgage, so that sweet house slips through your fingers.
You can avoid that picture by shopping for a mortgage before shopping for a home. A mortgage lender, such as Shamrock Financial, will take a gander at your overall financial situation and determine how much of a mortgage you can get pre-approved for. Having this number gives you the lift off to find the house you love – and can buy. Your mortgage lender can also offer advice about improving your financial situation.
A fixed rate loan doesn’t mean your payments will stay the same.
After the 2008 housing collapse, it’s natural that every first time buyer might prefer a fixed rate mortgage instead of the confusing pathways of non-conventional loans. One stable mortgage payment all the time, right? Nope.
Sure, that monthly withdrawal contains your mortgage payment, and that will stay the same for your term. But that withdrawal can include an escrow payment, real estate taxes, insurance payments, and more. These amounts can change – both increase and decrease – but if you haven’t accounted for them, you could be in for a surprise.
Your home’s value could rise. Or fall.
When you decided to buy a home, most likely you had people tell you, “It’s a great investment!”, or “You were throwing your money away on rent!”. Did you know that both of those statements are wrong? First, the rent. You throw money away on things you don’t need. But you need a place to live, and you get that either by renting or buying. Of course, paying too much in rent is throwing away your money, but you can also do that by paying too much for a home. Though you don’t build up equity, you also aren’t paying property taxes, maintenance, or extensive renovations. That’s money in your pocket.
As for your home being an investment: not really. It’s mainly a place to live. But if you like the idea of an investment, then like every other investment, its value can both increase and decrease. Can you handle it, emotionally and financially, if it decreases?
Anything can happen as a first time buyer. Get peace of mind with Shamrock Financial.
You think your home buying experience will be like your family’s or friends? It won’t. Everyone will have a unique situation. But with some good ol’ fashioned homework and research, you can minimize some of the potential surprises. Get together with Shamrock Financial to make sure your home buying strategy is both a sound one, and a realistic one.