5 Hard and Fast Rules for First Time Home Buyers

Purchasing your first home is a really big deal – it’s what puts you in the big leagues. No more do you have to keep shelling out money for rent and not really seeing any return except for the comfort of having a roof over your head. Of course there will always be that section of people who believe renting is better than buying, but if you are truly financially and emotionally settled in your life, you should definitely purchase. However, there are a few basic and fundamental rules that you must follow before you do. Owning a home is no small matter and there is a lot to consider. Here are five hard and fast rules for first time homebuyers.

  1. Don’t buy a home that is too expensive. One of the biggest messes you can get yourself into is purchasing a home that is out of your realistic price range. You may think this is an obvious rule, but many people still get themselves in this mess. So, you have to keep your finances in check and budget accordingly. You shouldn’t be spending more than 30% of your income on your housing expenses, like mortgage, rent and all the other miscellaneous costs.

  2. Start small. This doesn’t necessarily mean start small in the physical sense, but you want to take baby steps when it comes to home ownership. Your first home should quite literally be a “starter” home. In the real estate market, it is a lot easier to get your feet wet by purchasing a simpler home – something newer and with a less complicated loan process. The last thing you want is to be tied down to a complex loan structure and an extremely long-term mortgage commitment. All that stuff can come later in life.

  3. Invest in a rental property that can pay for your double mortgage. If you have the capital, perhaps you can invest in a rental property. You can use the income from renting it out to pay both the mortgage of your starter home and your rental home. In fact, if you visit www.ashecountyrealestate.com, you can find some really amazing cabins in the woods. However, before you put your money down on a rental property, you want to make sure that you know exactly what you are doing.

  4. Expect the unexpected. Anything can happen – a job can fall through, a job opportunity may become available – literally anything. If this is the case, you want to be ready to jump or change your life accordingly. This is the nature of being young and peripatetic, so you want your house buying to reflect this. For instance, don’t purchase a home that will need multiple years of fixing up. By the time renovations are done, you may want to move.

  5. Plan to stay for five years. When you purchase a new home, you want to keep it in mind that the average first home is lived in for about five years. After that, it is either sold or kept as a secondary home. So, make sure that your mortgage agreement reflects this. At the end of the day, you want to make a healthy enough down payment and you don’t want to be locked into an eternal mortgage.