Buying your first house is a really important step in your life. You want to be sure that it is going to be a great one and that you make a correct choice. Unfortunately, this is not as easy as some may think. You cannot simply look at the price and expect to make a great choice. Ideally, you want to own something like Lyon Living Apartments in California. In reality, this may be outside of your budget. Due to this, here are some important things to ask yourself before you buy the first house.
Can You Afford The House?
Any home buying will significantly impact personal finances. You want to be sure that you can actually afford the expense, even if housing is now much more affordable than ever. Look out for the incentives that may be available but mainly focus on the upfront costs like new furniture, closing costs, moving expenses and down payments. You will want to have enough cash to cover all of these.
Will You Live In The House For The Next 5 Years?
One of the huge home buying mistakes is purchasing a property and then moving a short time after the transaction is complete. Generally speaking, you want to be sure that you will live in the home you buy for at least 5 years. If you do not do this there is a huge possibility expenses are not going to be recouped as the home is sold. At the same time, the very first mortgage payment years are normally covering just the interest. The principal still remains in place. This means that home equity is minimal. It is much better to rent when a move is expected in the following years.
Is The Home Worth The Asking Price?
The home seller is obviously interested in getting as much as possible and it is up to you to determine if the asking price is worth it or not. In some cases you do want to spend a little more than you initially wanted when you have some extra unexpected perks like included appliances, a completely remodeled kitchen or a really generous outdoor area. Keep in mind that you are not actually just buying a house. You are buying a home so its worth will be subjective to a degree.
Do You Have Enough Cash Available?
When referring to budgeting for buying a new house, this is, most likely, the most important question you want to ask yourself. You need to bring in a larger upfront cash amount than you may expect as down payment and closing costs. This can range anywhere between 3% and 20%. You want to be sure that this leaves you with enough cash reserves to handle emergencies like job losses or accidents. Do not put all your cash into down payment as you never know what happens in the future.
There is a lot of math involved in buying a new home and you need to do it. If you do not have a high experience and you do not really know what to do, it is generally better to work with a real estate agent as you buy your first home.