Wanting a new home for yourself goes beyond just realizing the dream, especially if it’s the first time. Of course, it’s a significant milestone worth celebrating, but this milestone affects almost every aspect of your life, from finances to your family and your career.
Naturally, you must make guided decisions before making the biggest purchase of your life. Here are the five crucial steps to take in buying your first home.
Step One: Find Out If You’re Ready.
Homeownership comes with many responsibilities, and it never truly ends after closing a deal on a property. With buying a new home, you are also expected to cover monthly maintenance and utility expenses, besides your other costs for food, water, shopping, phone bills, credit card, etc. That said, don’t give in to the pressure just because family and peers have bought their own homes. Find out if you’re ready and consult a financial manager if necessary. Before making the big step, also account for your savings, emergency fund, and business or career stability. Without ensuring these aspects of your life, you could find yourself in sticky financial situations.
Step Two: Choose The Most Suitable Loan and Payment Option.
It’s safe to assume that you may need a loan to cover the expenses of obtaining your new home. With that said, you must also seek the professional advice of a mortgage broker to help you cut expensive costs. This way, you will be presented with the best options, such as adjustable-rate mortgages and fixed-rate mortgages. With an adjustable-rate mortgage, interest rates fluctuate over time. Although the initial rate is lower, the rate may rise according to the market, making payments unpredictable. Meanwhile, a fixed-rate mortgage does not fluctuate with the market or the economy and provides you with a fixed monthly fee to simplify budgeting. If interest rates fall, you may be able to refinance and save money.
Additionally, be wary of hybrid mortgages that begin with a low fixed rate and then move to a higher variable rate. You must also research the most suitable payment options that fit your lifestyle. Some people prefer 15- to 20-year loans since they are shorter and offer lower interest rates. On the other hand, 30-year loans are popular for their reduced monthly payment, although with higher interest rates.
Step Three: Prepare Your Down Payment.
Most homes require a 20% down payment. Paying less than this amount may cost you private mortgage insurance (PMI), which is one more thing you have to consider as a buyer. To err on the side of caution, make sure you secure your downpayment to avoid future financial pitfalls.
Step Four: Find a Real Estate Agent You Trust.
After determining your budget and getting pre-approved for a mortgage, choose a decent real estate agent to assist you in selecting a home that meets your demands while remaining within your budget. Once you’ve made an offer, your agent should get you the best deal possible. They can also assist you with the paperwork and closing procedure.
Step Five: Do a Complete Home Inspection.
Once you’ve found the right property, have it thoroughly inspected for hidden flaws before making the big purchase. A thorough house inspection can discover deficiencies that may dissuade you from purchasing the property, such as mold, termites, foundation problems, or leaks.
Mitch Stam of Desert Springs Mortgage LLC quoted “If you are aware that the house needs significant repairs, you may negotiate a lower price, but ultimately, a failed home inspection test can be used to justify walking away from a contract without losing earnest money.”
Buying Your First Home with Desert Springs Mortgage
Buying your first home takes patience and perseverance. It involves a lot of time and effort to pick out the best loan, assess your finances, and find an agent you trust. Once you sign the final papers and change your accounts’ address, you’ll find yourself entering a new adventure of moving in, repainting, and furnishing your new property. That said, make sure you’re ready for all these different stages because only then will your home be finally yours.
Are you a first-time homebuyer in Phoenix? Desert Springs Mortgage LLC is an outstanding full-service mortgage brokerage that offers multiple financing options. With us, you can find exactly what you’ll need. Call us today at (623) 432-1309!