Is buying a home the best way to go?
Purchasing a home isn’t for everyone. In some cases, renting is more advantageous. Take a close look at the comparisons between renting versus owning to guide you towards the best decision for your lifestyle.
Why are you purchasing a home?
Purchasing a home is one of the largest, most exciting purchases you can make. It also can provide great benefits such as:
- Building equity in the investment of your home
- Earning potential tax benefits*
- Feeling the stability that can come with ownership
- Enjoying the options to personalize and customize your home as you see fit
- Experiencing the freedom to landscape to your heart’s content
- Establishing deeper and stronger connections with your community
Before you move ahead, it’s important to understand your reasons for wanting a new home. You’ll also want to be sure purchasing a home fits with your lifestyle by asking yourself these questions before committing to the home-buying process:
- Will your family be on board with a new home?
- Do you wish to downsize or upsize your current living situation? Why?
- Do you have the necessary funds to buy and maintain a home?
- Do you have the necessary time maintain a home?
- Are you moving to a new location or relocating for a job?
- What type of amenities would you like your new home to feature?
How much can you afford?
Determining the amount you can comfortably afford will go a long way in helping you start your home search. Your savings, level of current debt, and pre-tax income should all be taken into consideration. By answering questions like, “How much do you have available for a down payment?,” “How much would your monthly mortgage payment be?,” and “How much should you budget to ensure that you can still live comfortably?,” you’ve taken the first steps toward finding your next home.
How will you estimate the cost of your new home?
The cost of a new home can feel overwhelming, but gaining a clear picture of what you’re committing to can ease the stress of such a large decision. Before pricing your home, be sure to calculate the costs of items like maintenance and repairs, home inspection, cosmetic improvements, real estate agent commission, mortgage payments, storage and moving and packing fees. First Choice Loan Services can help you to outline and understand the various costs associated with a new home.
How will you estimate the sales price of your current home?
If you’re buying a new home, you may be selling your current home. Generally in these cases, the more realistically your home is priced, the more likely it will sell faster. To gain a better sense for how much you can list your home for, we recommend working with a property appraiser or real estate agent can help you decide on a strong listing price by comparing similar properties. Also, real estate professionals will also be able to assist you in adding curbside appeal and applying staging techniques to enhance your home and make it even more attractive to potential buyers.
What type of home is the best fit for your lifestyle?
Once you determine how much you can comfortably afford, it’s time to put some thought into the type of home that best fits your needs and lifestyle. From single-family homes to condos to manufactured homes and much more, there are many options you are able to consider. Each home is unique, and giving some thought to your housing needs will help you to narrow down your options and speed up your search.
Who can you trust?
The process of buying a home requires a good deal of time, information and energy from the homebuyer. To ensure that you obtain sound guidance and resources, you need a trusted partner who can guide you through every step. At First Choice Loan Services, you’ll find exactly that—trusted mortgage professionals who make you their first priority!
What are some common mistakes?
The three most common mistakes made by first-time homebuyers are:
Not knowing your credit score
Your credit score or FICO® Score summarizes your credit risk and helps lenders determine your interest rate when applying for a loan. Typically, the higher your score, the lower your interest rate on a loan. You can acquire a complete copy of your credit report from agencies such as Experian, Equifax and TransUnion.
Not getting pre-qualified for a loan
Pre-qualifying saves you time by providing a realistic price range to guide your search for your home and gives you an advantage over competing homebuyers who are not pre-qualified. During pre-qualification, First Choice Loan Services will help you to determine the approximate amount you can borrow. Your available funds for a down payment, current income, and assets and debt over the last two years helps to determine if you pre-qualify for a mortgage.
Not budgeting for maintenance and repairs
Underestimating expenses for home maintenance and repairs can catch you off guard when bills begin to accrue. When creating your budget, be sure not just to account for minor expenses like lawn care and utilities, but also major costs such as a new roof or new central air. A good rule of thumb for determining these expenses is to set aside about 2% of the home’s purchase price into a maintenance fund. In some cases, you can include the costs of repairs with the home loan. To learn more about this, read about the Renovation Loan products offered by First Choice Loan Services.