When it comes to home buying I am the farthest person to direct you in exactly what to do or how to do it. But what I can share with you was things that I learned or helped my husband and I when we bought our first home in 2010. We were pretty young compared to the age ratio that most people buy their first home so definitely take my tips with the knowledge that if these helped us buy our first home in our early twenties then they can help anyone.
Purchasing your first home can be both exhilarating and exhausting at the same time. Especially if your strict about your budget and the type of home you want. The more flexible you are in your first home your buying the more likely you are to come to an agreement and find the perfect starter home.
Figure out your budget
When you first decide your wanting to buy your home your top priority should be figuring out your budget. What can you afford monthly will let you know the amount of loan you can get and then will set you off on your journey of finding your home.
This can be the hardest task to do if your trying to sit down and calculate it out all manually. So I definitely recommend using a mortgage calculator to help. I love the ones at Mortgage Calculators. They have a variety of calculators to help you. They have a basic one you can use to figure out what you can afford or they have a more detailed one that you can calculate all your expenses including your insurance, taxes and interest. To get a full understanding of what your actual monthly payment will be. I’ll link them both for you to check out.
Get your debt in order
The second thing you’ll want to to get into order after figuring out your budget. Is to get your debt into order. Knowing your debt to income ratio will help you know how easily you’ll be qualified to get a loan for the amount you’ll be asking for. Your debt to income is the amount of debt on your credit that your responsible for paying each month. Credit cards play a huge factor into this. Along with any auto or personal loans you have that your paying monthly on too.
If you can I’d tackle trying to pay off any credit cards you have as fast as you can. So that you may qualify easier for a loan. If your debt is high and it takes up the majority of your income then you will most likely wont even be pre-approved for a loan. No bank wants to borrow money to someone who shows on record that they can’t afford it. They also don’t want your debt to rake in at being all of your income. Your loan would be a liability for them and no one wants to lend money that’s guaranteed to end in a foreclosure form on payment.
If your wanting to check out what your debt to income ratio looks like then you should definitely try out this calculator (I’ll link it). It will help you determine how much of your debt you should probably pay down before seeking out a loan.
Buy to fit your family size
On thing I see so many friends and family do right away that I definitely suggest not doing, is buying a home that’s too big. Even if you can afford that 4 bedroom home with a two car garage right now. But there will just your spouse and yourself that will be living there and you share a car. Then you are automatically doubling up the cost of your monthly mortgage. When you could easily buy a smaller home that fits your family size now with a little room to grow. This will save you monthly expenses that you could other wise use to fix up your home to raise the value and your equity in it. Or save it up for any other expenses. No need to buy out of your means just because you can.
The bigger your home the more you have to clean and pay electricity on. Which doesn’t sound like much. But say you have a 10 year plan to live there and then sell to invest in your bigger family home once you have 3 or more children and two family vehicles. Wouldn’t you rather walk into that 2nd home automatically in the topside by using your equity from your first home. This can in turn help keep your mortgage lower and budget friendly in the long run.
Go with a slight fixer upper
If you find that your loan budget amount isn’t quite what you thought it be. Especially if it’s based off your debt to income ratio. Then maybe consider buying not the prettiest home on the block. But more the one that’s move in ready but needs some tlc. Paint and cosmetic type of things are something that you can easily do your self to save on financing a fully complete home. And there’s just something about putting love and labor into your home that makes it feel like it’s really yours.
Choosing paint colors and updating fixtures gradually isn’t really that hard and by doing it yourself you save so much more than you would buying a home that’s fully done. You also won’t be paying interest on those details for the next 15-30 years.
Don’t jump in to fast
When you finally decide that your ready to buy your first home and have your loan amount, debt to income ratio and the type of home all set into motion you will quickly find yourself so excited to start shopping around that you might find yourself jumping into to buy the first home you check out. But Don’t! Shop around and your so many houses. Your dream starter home will come when the time is right. Check out and tour lots of homes. You’ll also learn how flexible your willing to be for the top necessities you find yourself attracted to in a home.
Once you jump in and buy a home your kinda stuck with it for at least a couple months to a couple years. So shop and keep your options open.
I hope these tips help you to start your journey on buying your first home. And remember to enjoy the process and have fun. This is going to be a new life experience and before you know it, you will be a home owner and the shopping process will be part of the past. Don’t rush through it too fast.
Here’s some links to some other great resources that I think you check out to help you feel a little more prepared or fluent in the home buying process.
Mortgage graphs by credit score
Thank you for taking the time to stop by and check out my 5 tips and tricks to buying your first home. I really hope you find one you love and enjoy making it yours.
Until next time. Live a life you love!
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