Real Estate is the demand of the hour. Demand for real estate property and home is increasing day by day. Cost of land and home building materials is high. During this time of ever increasing rate of real estate and home, it is getting more and more difficult for common man to buy his dream home. Home loans have high interest rates and have their own terms and conditions.
So, how should a common man with average income buy a home? Even if you have good source of income and you are planning to buy your dream home, it is never going to be easy for you. Dummies and first time home buyers should follow some rules and tips before they buy a new home.
Below I share some expert tips and advice for first time home buyers.
1. Take advantage of programs for first-time home buyers
Many countries and governments, offer help and incentive for people who are looking to buy a home for the first time. Several finance companies also have offers for such eligible candidates. This opportunity is often over-looked by most first-time home buyers maybe because they are not aware of any such program.
If you are a first-time home buyer, I suggest that you contact you local county government or municipality and check out for any such program. Many counties in the United States suggest incentives for first-time home buyers. These insensitive may comprise of down payment backing and grants which is a scheme by the government to help with free money for buying a home if you meet all their terms and conditions and eligibility.
Some governments have tie-ups with finance companies to offer home loans at reduced interest rates for the first-time buyer if the buyer meets the eligibility criteria. Check out for all such programs before buying a new home.
2. Attend Home Selling Seminars
Try to attend home selling seminars. Many such seminars are organized to let people know about home ownership and foreclosure. Attend these seminars to learn about real estate in your area. Many first-time home buyers are not aware of circumstances such as foreclosure and responsibilities of being a homeowner.
Many home loan finance companies also make it compulsory for you to attend these discussions to meet the criteria for first-time home buyer programs. If you want to take benefit of these offers, check with your county’s division of housing. Many of them have their own guidelines to qualify for first-time home buyer programs.
3. Choose Your Location as Per Your Budget
If you want to buy a home in one of the best places to live, it is obviously going to cost you more. Choose a location that is not very expensive but is suitable for you and your family. Make sure it has basic necessities such as good amenities, schools and colleges, transportation and pollution-free environment.
The place you choose should not be too far away from your office or from your kid’s school. Keep in mind your budget while choosing a place to buy a home. Do not try to buy an expensive home in an expensive place or you may fall in trouble later.
When buying a flat or an apartment, give preference to an upcoming area, so that you get good appreciation on your real estate in future.
4. Decide the Type of Home You Want to Buy
Homes are of different types and different sizes. Cost of a home depends on several factors such as its location, size / area, facilities, building material and so on.
Decide on the type and size of home you want to buy. See home many members are there in your home. Make a list of basic necessities of all your family members. Because buying a home is a big investment, and for many people it is the first and last big investment, make sure you can considered future requirements while choosing a home to buy.
Consult with people and real estate agent of the area where you are planning to buy a home. Make note of the property rates. You have several choices when it comes to buying a new home – apartment, a duplex, a row house, a penthouse or a bungalow. Each of them has their own advantages and disadvantages. Decide on the needs and requirements of your family and make a decision.
5. Check and Compare Selling Prices of Homes
As a first time home buyer, you should always check and compare selling prices of comparable homes in the area where you are willing to buy your home. There are a number of such websites that can help you. Sites such as such as Zillow and Homegain can give you basic idea of rates of real estate in area that you select.
Alternatively, you can also look around for MLS listings in your area on sites such as National Association of Realtors.
6. Calculate what you can Afford
Maybe, you can buy an expensive somehow today, but you may not be able to afford its future expenses. Therefore, it is extremely important to calculate and workout of figures that you can afford.
Tools such as Bankrate’s mortgage calculator can help you calculate your real estate and mortgage figures.
Make a list of your income and deduct your total monthly housing cost, taxes and homeowners insurance. This will give a rough idea of the amount that you should spend in buying a new home.
Remember that in few places, there are different rules for paying taxes. At the same place, existing home owners may pay tax different from you as a new homeowner. Thankfully, there are several easy ways to estimate your taxes. So be aware of the tax rules.
7. Calculate Closing Costs
Never overlook the upfront cost of settling your home. Workout the amount that you are more likely to pay in closing costs.
Closing costs of your home may include origination fees charged by the lender, title and settlement fees, taxes and prepaid expenses such as homeowners insurance or homeowners’ association fees.
If you need help with calculating your closing costs, refer to bankrate.com.
8. Do NOT spend beyond your capacity
Real estate and property experts and gurus recommend that a new home buyer should never spend more that 30% of their income in buying a new home or they may fall into financial trouble in near future. Keep this in mind and never spend beyond your capacity.
9. Take Expert Advice
First-time home buyers should always take expert tips and advice from experts and trusted and reputable real-estate agents. Make sure that you not fall into the trap of a greedy real estate agent.
10. Be prepared for future expenses
Once you have bought a new home, be prepared for expenses for home maintenance, home and kitchen appliances, roofing, flooring, home improvement, repairing and so on. There won’t be any landlord to pay for all these expenses. Now you are the owner and the landlord.
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