Buying a home is one of the most exciting times in a person’s life, but it can be one of the most frustrating. Understanding the home buying process before actually being apart of it is an important first step for many. Failing to be prepared and understand the various obstacles you’re going to face can cost you thousands. Therefore the following list includes a couple of tips for the first time home buyer.
Fix any Debt Issues First!
When people decide that it’s time to purchase a home, they usually aren’t talking about their feelings but can afford to pay a monthly mortgage. If you’re simply feeling like buying a home, but your finances aren’t in order, then that should be taken as a clear sign not to do so just yet. You must first fix and clear any outstanding debts that you may have. You don’t want to end up having to choose between paying off a credit card bill or your mortgage.
Create a 6-Month Emergency Fund
Even the newest homes can cause you problems; therefore, it is incredibly important to have an emergency fund ready the minute you walk into your brand new home. Water leaks, mold, or even simple appliance repairs such as a broken refrigerator can cause a fortune, and if you don’t have the money to pay for it, you may find yourself in instant debt. Besides, having an emergency fund can also provide you peace of mind that if you lose your primary source of income that you do have six months to either find a new job or work something out with your bank. This allowed time can often mean the difference between losing and keeping your home.
Understanding How Much You Can Afford
A beautiful backyard, big open spaces, and a finished basement can be challenging to say no to a home like that. This type of situation is often what places people into a deep financial hole. When buyers don’t understand how much they can realistically afford, they will usually purchase too little or too much. Therefore it is paramount that you get pre-approved for a mortgage loan before looking at any homes.