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Buying your first home is a major life achievement. Financial planning, along with deciding your needs and desires for a house are essential to ensuring the process of purchasing your first home goes smoothly. If your are considering purchasing your first house, read this before you start the home buying process.

What Type of Home and Neighborhood Best Fits Your Lifestyle

As a first time home buyer, one of the earliest decisions you must make is the type of property that is best for you and your family. Residential property options mainly include traditional single-family homes, or single and multi-family townhouses and condos. Then you must determine specifically what your need in a home. For example, how many bedrooms and baths do you want. Finally, determine the type and size of the neighbourhood you would like now and down the road. Buying your first home is one of the biggest purchases you will make in your lifetime. By selecting a home and neighbourhood that matches both your present and future needs, you will ensure happiness for as long as you stay in your first new home.

Financial Considerations for the First Time Home Buyer

It is essential to evaluate your financial health before you begin your search for a new home. First determine the monthly housing costs you can comfortably afford. Monthly costs include the mortgage, property taxes, utility costs, homeowners insurance, neighbourhood fees, etc. Next find out how much a lender is willing to give you to purchase your first home. Ideally, obtain a preapproval for a loan. A pre-approval will save both you and your real estate agent time by eliminating unrealistic options. Your lender will take into account your monthly income, how long you have been at your current job, your debt, the amount you have for a down payment, and your credit score. Once you have this information, you may consider lowering your debt and improving your credit score before beginning your search for your first home. A good credit score is above 720. Purchasing your first new home is an exciting time. Proper monetary planning will ensure your transition into home ownership is positive and not financially overwhelming.

Calculate Upfront Costs of a Home in Your Price Range

Once you know what you can afford in a mortgage and home, you need to make sure you have enough savings for the upfront costs. Upfront costs include the down payment (typically 20 percent of the total purchase price) closing costs and fees. It is never to early to start saving for your first home. It is best to keep these savings in an accessible and safe account. Early planning for all costs associated with buying a new home will lessen the chance of disappointment when you find your dream home.

Buying your first home is a big decision and a significant investment. Planning and saving for your new home can help ensure you are financially comfortable when the day finally comes to buy your first home. Visit Falconcrest Homes for more information on things to consider before your start looking for your first home.