Embarking on the journey of homeownership is an exciting and transformative experience. It’s a moment that marks a significant milestone in our lives and brings with it a sense of accomplishment and pride.
But, along with that sense of pride comes a whirlwind of emotions, challenges, and a whole new world of responsibilities.
As a first-time homeowner myself, I understand the mix of excitement and uncertainty that comes with this new chapter.
From finding the perfect place to call our own to navigating the complexities of mortgages and negotiations, the process can be both exhilarating and overwhelming.
Here’s a realistic view of what it’s like buying a home in 2023.
Before the Buy
To save yourself from heartbreak and disappointment, it’s critical to get your finances together before you even start the home search.
Preparing for the Purchase
Trust me, there are lists upon lists of all you can do to prepare for this big financial move, but I’ll just share a few I found to be important:
- Outstanding Payments: Consider paying off outstanding debts such as credit cards or loans, as it can significantly improve your chances of securing a mortgage and maybe even getting a better interest rate.
- Emergency Savings: Unexpected repairs and expenses can easily arise once you become a homeowner, so consider preparing a financial safety net, just to be safe (and comfortable, too).
- Planning for Monthly Expenses: Set a budget and ensure that your income can comfortably cover monthly costs. These can add up fairly quickly if you don’t keep track. Some monthly costs I wasn’t expecting were electricity, water, internet, and food on top of the mortgage and other bills I had before the move, like insurance, phone bills, subscriptions, and the list goes on.
- Down Payment: Alongside this, having a good down payment is beneficial, as it can lower your mortgage amount and possibly eliminate the need for private mortgage insurance (PMI). The median home buyer puts 14% as their down payment on a home, but you can choose whatever works best for you.
- Closing Costs: These usually range from 3-6% of the purchase price of the home and can include fees such as appraisal fees, title insurance, and attorney fees. Being aware of these costs and having the financial ability to cover them is crucial when preparing to buy a home.
In addition to the financial aspects, it’s essential to have a long-term plan for staying in the area. Buying a home is a significant commitment, and it’s important to consider factors such as job stability and potential future changes in living arrangements.
- Don’t Do It Alone: Consult with a financial advisor, credit union, or mortgage professional to learn which finance options are available to you and to understand how you can prepare your finances based on your unique situation.
Get Pre-Approved for a Mortgage Loan
I decided to go get pre-approved for a mortgage loan before even scrolling through real estate sites like Zillow, Realtor.com, etc., as I wanted to set realistic expectations regarding what I could buy. (Okay, maybe I scrolled before getting pre-approved to dream…) But I will say, it can be soul-crushing. Let’s face it, what’s the point in searching for a home if you don’t know if you can buy it?
And be sure to get your documents ready, because getting pre-approved involves submitting your financial paperwork to a lender who will then review it and determine how much they are willing to lend you.
What documents will you need? You ask…
You will need to gather documentation such as:
- Bank statements
- Tax returns
- Proof of income
The lender will then review these documents, as well as your credit score, to assess your financial stability and ability to repay a loan.
Once you are pre-approved, the lender will provide you with a pre-approval letter. This letter states the maximum amount the lender is willing to lend you.
You can then show this letter to your real estate agent, who can use it to guide you toward homes within your budget.
Getting pre-approved for a mortgage loan not only helps you determine your price range but also demonstrates to sellers that you are a serious buyer.
It can give you an advantage in competitive markets and may expedite the closing process when you find the home you want to purchase.
Finding an Agent and Starting Your Search
So you’ve gotten your pre-approval letter from a lender, and now you’re ready for a real estate agent.
A skilled agent offers several key benefits that can greatly enhance your home-buying experience:
- They provide valuable market insights.
- They have access to extensive data and knowledge about local neighborhoods, recent sales, and market trends.
- They’re experts in determining offer prices.
- They can help you assess the value of a property based on factors such as location, condition, and comparable sales.
- They help you make competitive offers that are both realistic and fair.
- They can advocate on your behalf, navigate tricky situations, and secure the best terms and prices for your purchase.
- They know the ins and outs of different neighborhoods, including schools, amenities, and transportation options.
- They can provide professional recommendations for other important services, such as mortgage lenders, home inspectors, and attorneys.
- Their network of industry connections saves you time and ensures you work with trusted professionals throughout the home-buying process.
Finding a real estate agent is one thing, but finding the right one for you is another ballpark. To ensure you find the right agent, be sure to do your research, and don’t be afraid to interview a few!
The Search Begins
Once you get through the tough part of preparing your finances, getting documents together, getting pre-approved, and researching the perfect real estate agent, it’s time to begin the exciting search for your new home.
Now this is where I’m going to switch from the technical, logistical stuff, to the more emotional side of your home search.
When going to open houses, private showings, and even looking at homes online, it’s hard not to picture your life in that home.
But the reality is, you’re going to miss out on a lot of offers.
Remember to remain patient and proactive in your search, as finding the perfect home can take time.
And also keep in mind, as much as you love a home, don’t deplete your savings by putting an offer way over the selling price just to get your foot in the door. The perfect home will find you.
After The Buy
Congratulations! You’ve successfully navigated the buying process and are now the proud owner of a new home. But the journey doesn’t end there.
Owning a home comes with its own set of responsibilities and considerations. From understanding the maintenance involved to managing your finances, it’s important to have a refresher on what comes next.
Create a Maintenance Schedule
One of the first steps you should take after buying a home is to create a maintenance schedule. This schedule will help you stay organized and ensure that you don’t overlook any crucial tasks.
Include regular maintenance tasks such as cleaning gutters, checking the HVAC system, and inspecting the roof. Additionally, seasonal tasks like winterizing your home and preparing your yard for spring should be included in your schedule.
Stay on Top of Repairs
Regular maintenance is essential, but repairs are inevitable. It’s crucial to address any issues promptly to prevent them from turning into more significant problems.
Keep an eye out for leaks, cracks, or any signs of damage. If you notice something that needs repair, don’t delay in contacting a professional to assess the situation. Ignoring repairs can lead to more extensive and costly damage down the line.
Learn Basic DIY Skills
While it’s essential to call professionals for significant repairs, learning some basic do-it-yourself (DIY) skills can save you time and money for minor tasks.
Familiarize yourself with tools and techniques for tasks like fixing a leaky faucet, replacing a light fixture, or patching small holes in the wall. However, it’s crucial to know your limits and call a professional for complex or potentially dangerous tasks.
Budget for Maintenance and Repairs
Homeownership comes with financial responsibilities beyond mortgage payments. It’s essential to budget for ongoing maintenance and unexpected repairs.
Set aside a portion of your monthly income specifically for home-related expenses. This way, you’ll be prepared when unexpected repairs arise, and you won’t have to dip into your savings or rely on credit cards.
Consider Home Warranties
Another option to consider as a first-time homeowner is a home warranty. A home warranty is a service contract that covers the repair or replacement of major systems and appliances in your home. Having a home warranty can provide peace of mind and help alleviate the financial burden of unexpected repairs.
Seek Professional Help
While you can handle some maintenance tasks on your own, it’s essential to know when to seek professional help.
Hiring a qualified and reputable contractor or service provider for complex repairs or tasks beyond your skill level is crucial. They have the expertise and experience to handle the job safely and effectively.
Buying a home can be a tiring and emotional process that can feel impossible in the world we live in today. But the tenacity pays off. And for those reading this going into the process, don’t give up. While it may seem like ‘too much’, it’s something you get to make your own.
Owning a home is an exciting and rewarding experience, but it requires ongoing maintenance and care. By staying proactive, budgeting for repairs, and seeking professional help when needed, you can ensure that your first home remains a safe and comfortable haven for years to come.
Featured photo by Henry & Co.: https://www.pexels.com/photo/black-steel-welcome-hanging-signage-1406282/