According to Zillow, the median price of a house in 2021 was $272,446. And if you’re planning to buy a home soon, it goes without saying that with your mortgage, one small oversight could leave you on the hook for thousands of dollars.
What can you do to avoid these sorts of mishaps? Is there any way that you can make the process of becoming a homeowner easier on yourself?
Here are four key questions that every first-time homebuyer needs to ask themselves before they start signing the paperwork.
Question #1: Can I Afford to Buy Right Now?
It’s possible to be in a position where technically you can buy a house. However, if you have other debts you’re paying off or an expensive Starbucks habit, homeownership can quickly put you under pressure financially.
So how do you avoid getting accidentally caught up in a paycheck to paycheck lifestyle? What are some ways that you can keep your house affordable?
Whether you’re looking at listings and attending open houses or you’ve narrowed down your list to the point where you’re entertaining the thought of making an offer, you can save yourself a lot of money by crunching numbers ahead of time. So pull out your calculator, your notepad, and your nearest writing utensil and start nailing your budget.
Question #2: Is My Credit Score In a Good Place?
When you make your application and the underwriter pulls up your credit report, you want to have a history that says “You have nothing to worry about because I’ll pay you back.” But before that happens, you want your credit score to be whipped into tip-top shape.
Besides influencing the “yes” or the “no”, your credit score can also influence your offered rate. And when you’re looking at 15, 20, or even 30 years of monthly mortgage payments, even half a percentage point could be enough to create a nest egg, start a college fund, or finance your next tropical vacation.
Although taking steps to lower your cost of living while paying down debts can go a long way towards polishing up your credit, it can still take time for the new status quo to be reflected in your credit score.
Question #3: Could I See Myself Living Here for the Next Few Years?
There’s one key way that buying a house differs from renting a place:
Mortgages are designed to be more or less permanent. Unlike a rental situation where you can eventually leave behind a crazy landlord or a disorganized roommate, you can’t just pack up and leave with no strings attached.
So why does this matter?
Because it’s important to think about the kind of house you’ll need as the years go by. If your career or your personal circumstances could prompt a move in the near future, you may be better off renting instead of buying. If you’d like to start a family in the next few years, for example, the quality of the local school district will more than likely be important.
But even if you’re not planning to leave your city or make drastic lifestyle changes, it’s worth thinking about what kind of a house you’ll need as the years go by. One of the major benefits of owning real estate is that it appreciates over time. If you want to experience those benefits, it’s important to buy a home that you can live in and stay in for years to come.
Question #4: Have I Paid Attention to the Little Details?
In a very general sense, buying a house is a pretty straightforward endeavor. But when you get into the nitty-gritty, there are a lot of easily overlooked mistakes that first-time homebuyers may want to avoid.
After all, the last thing you want is to be stuck with an underwater mortgage or a higher mortgage rate because of unforced homebuying errors.
What do property taxes look like in this area? Is there a homeowners association? How much development is the neighborhood experiencing? This might seem like nitpicking when there’s a wonderful home to move into, but it’s better to be safe than sorry where your home purchase is concerned.
Simplify Your House Hunt By Asking Just Four Simple Questions
No matter which way you slice it, buying a house for the first time is a major personal milestone. But along with all the positive feelings that come with being able to say “I own my home.”, it’s important to do your due diligence to ensure that you’re purchasing the right house. To that end, the four questions we’ve just listed can do a lot to help you make a seamless transition.