Buying a home is a big decision. It’s probably the biggest purchase you’ll ever make and the most debt you’ll ever have at one time. Purchasing your first home is something you’ll never forget, probably because it’s a major milestone in a young person’s life and probably because it’s a life changing decision.
Putting your savings into the purchase of your first home definitely takes a toll on your financial status, but it will most likely be worth it in the long run. You’ll have a place to call your own and hopefully the value of your investment will increase over time.. The home buying process can be a lengthy one, but having a checklist of things to do can make it a lot easier.
If you want to buy your first home here are the things you’ll need:
Savings for the down payment
Buying a home requires a down payment. It’s a lump sum of cash that you give to the bank to secure your mortgage loan. The amount of the mortgage loan is the total purchase price of your home minus the amount of the down payment. This will save you a great deal of money. This automatically gives you equity in your home and the larger the down payment the lower the mortgage amount and therefore the lower your monthly payments.
The expertise of a personal banker
If you want to get a good deal on your mortgage rate you’ll want to ask a lot of questions. Go to a bank you trust, but don’t accept the first offer says popular personal finance website The Simple Dollar.
“Landing the best home loans and home equity line of credit (HELOC) rates means doing your homework. It will require comparison shopping, fiscal discipline, and a keen eye for APR quirks and fees that can tip the scales in favor of one loan over another. Here are some tips for finding the best home equity loan rates.”
Furniture
If you are moving into a new home from an apartment or from your parent’s house the odds are you don’t have enough stuff to furnish an entire home. Don’t worry it’s very normal. Furnishing several rooms inside a home plus a backyard takes time. If you ask your parent’s they’ll probably tell you that it takes a lifetime to accumulate household belongings.
My advice is to give yourself a goal and buy a big ticket item every six to 12 months, don’t get into debt because you want to furnish your first home the day you move in. Use an ebay.ca promo code to save money.
An emergency savings account
Any homeowner will most likely tell you that there are always unexpected expenses when it comes to the maintenance of your home. A broken furnace, a leaky faucet or a frozen pipe can all be expensive costs that pop up unexpectedly. Before you decide to buy a home make sure you have three to six months of total expenses saved up. This includes the mortgage payment, utilities, property taxes and household expenses.
It will help lower the financial burden if you have an emergency and it will ensure you can still afford to make your mortgage payments if you should lose your job or become disabled.
A lawyer or notary
There’s a lot of paperwork involved in buying a home. First time homebuyers shouldn’t try to go at it alone, let a professional help out and guide you along the way. A lawyer or notary can help explain the fine print of your purchase agreement and point out any unusual items.
The help of a real estate agent
Enlisting the assistance of a real estate agent can save you both time and money when buying your first home. Just like a notary or lawyer is a professional who can help guide you in the right direction when it comes to your contract, a real estate agent can do the same thing for the negotiation of the purchase price.
Real estate agents know where to look for defaults, what questions to ask sellers and how to negotiate a better deal. They know the market and do this for a living so why not hire a pro. Buyers don’t pay anything for the assistance of a real estate agent, their commission is paid by the seller.
A handy man on speed dial
If you’re not a natural Bob Vila you’ll want to find a handy man who you can trust. You just never know when work will need to be done around the house and hiring a professional can save you a lot of anguish, time and money. Home Depot is great, but sometimes it’s just better to pay to get the job done right…the first time.
