Don’t Be Swayed
Before jumping into meetings with realtors and attending open houses, first-time homebuyers should be realistic about their budgets.
Purchase a home you can afford, not one that stretches you to the limit. The right house allows you to save for retirement, college education, or perhaps your next home purchase, and it ensures you have liquid assets available in case of a medical crisis or a job loss. You never want to be “afraid” of your mortgage.
So, How Much Can You Afford?
Lenders are often very happy to lend you as much as your debt load allows. But remember, just because someone will lend you more money, it doesn’t mean you should borrow it. Ask yourself, how much house do I really want?
A Wish List… Not Wishful Thinking
What’s most important in your new home? Proximity to work? A big backyard? An open floor plan? A quiet street? Is it the number of bedrooms or bathrooms? What about other amenities like an attached garage or a pool? Local schools?
Beautiful Day in The Neighborhood
No matter where you’re looking to buy a home, it’s important to look what other homes in that area sold for recently.
Talk to The Neighbors
Speaking with neighbors can give you a more intimate sense of a property or area.
Think About Demographics
If you’re buying in a neighborhood that is full of renters, it only takes a few bad ones (or bad landlords) to drive the neighborhood and property values down. If the neighborhood is full of single people, will you be happy there if you have very young kids?
If you think you’ve found the neighborhood you want to buy in, take it a step further. Drive from your potential new home to your office to see what the commute is like, as well as to places you’d go on a regular basis, like the grocery store, gym and gas station.