First Time Home Buyer? Here is What You Should Know Before You Pull the Trigger
Last week I had a friend on Facebook ask a really important question for anyone that is going to be a first time home buyer.
She asked, “Things you wish people would’ve told you before you bought your first house.”
The responses she received were really good and I thought were also very important for any of you considering to buy your first house.
Some responses were not as helpful but were just hilarious.
So let’s dive into some of the best responses.
Inspect Expensive Appliances and Other House Features
Here is the scenario.
You just move into your beautiful new home after paying all of those expensive closing fees. Your savings account is basically at zero now. Dinner time comes so you venture into the kitchen to grab something out of the fridge to only find everything lukewarm.
The fridge has already burnt out.
While you are inspecting the house, you should consider the age of the furnace, appliances, hot water heater, roof, and windows. All of these items can create a major expense at some point in the homes life but we do not want them happening right away when you are already recovering from some major bills.
Now, sadly, bad luck does hit so not everyone will be able to avoid it but increase your luck by not buying a home with a hot water heater that is 15 years old.
Do NOT Get Hung Up on Cosmetics
Many people get overly worried about the small things in a house.
Do not fall into this trap.
The paint in the living room can be changed. The landscaping can be updated. Floors can be replaced. And cabinets can be refinished.
All of these projects will cost money but can be done in phases as you save up for each one, not going into more debt. You will have enough of that as a first time home buyer.
Be Picky About What You CANNOT Change
To follow up on the little things you should not get hung up on as a first time home buyer, you should get hung up on the things you CANNOT change.
These include the location, house layout, neighbors, lot size, and so on. Once you buy the house, these things are yours now. There is no going back until you sell the house.
Be very observant and picky about anything you cannot change to the home. Do your research about what you want in these things.
For my wife and I, location was a big deal. We did not want to live in the cookie cutter suburbs. We wanted to be 15 minutes from downtown, 15 minutes from the mountains, and close to work. Also, we wanted to be close to awesome restaurants.
The only thing we really did not get from our house was a basement but that has been surprisingly nice not to have (less to maintain).
Observe the Area at All Times
When my wife and I were in the process of buying our home, we made sure that we drove by at all times of the days. We even stopped, rolled down the windows, and listened to the neighborhood sounds.
I suggest you do the same thing. Even after you are under contract (you usually can still call it off).
We actually saw our future neighbor fighting with his son during one of the visits. We talked with another neighbor to find out that it was a one-off thing. Both were just having a bad day.
This could have gone the other way, were they fought every day. That would not be fun to live next to.
Check for Cell Service
With younger generations ditching landlines, it is crucial for any first time home buyer to make sure they get cell service in all parts of the new house.
It would really suck if you cannot lay in bed talking to your best friend who lives in Maine on the phone.
While visiting your future home for the first time make sure to check how many bars you have while walking from room to room.
If things are looking bad, there are ways around bad reception. Check with your cell provider to see if they will give you a signal booster.
Really Plan out Your Budget
When you are looking to become a first time home buyer, you really need to know your finances in and out. This is when having an awesome budget comes into play.
Need help making a budget? Check out Mint. To me, this is the best budgeting application out there. Period.
Go ahead and download Mint to create your budget.
You will want to account for every expense to figure out how much of a mortgage payment you can afford. It is best to even do some research on how much your utilities will be for your future home.
To start you off, see if you are making any of these bad spending habits that could be killing your budget.
Landscaping is something that can be easily changed. Do not believe me? Check out what I was able to accomplish this past Spring.
There are things you need to inspect though because somethings will be harder to change.
Is there a sprinkler system? If so, inspect the valves for leaks. Check for soggy spots in the yard, this may signal a leak in the piping.
How is the grading around the house? Does it flow away from the house or towards the house? Look beyond your future property to make sure water will not be flowing towards your house.
Lastly, look up. What is the condition of the trees around the house? Are they trees healthy or are they going to fall on the house in the next storm?
Also, make sure those trees are not going to be super messy trees for you. Some varieties will drop pods or seeds all times of the year. That is a lot of maintenance!
See if you qualify for First-Time Buyers Assistance
There are a lot of grants for first time home buyers. These grants are meant to help people buying their first home a lot easier by providing assistance with the down payment.
Upfront, this sounds amazing but might not be right for you.
Talk with your lender to hear about all the options. Be aware of particular clauses that might make the loan unfavorable.
For my wife and I, we only qualified for these grants if the interest rate was higher or we carried the private mortgage insurance (PMI) throughout the entirety of the loan.
This brings me to the last thing to watch out for, private mortgage insurance.
Watch out for this insurance that usually adds on about $100 to your monthly mortgage payment.
You will need to pay this insurance on conventional loans until you reach 20% of your loan paid off.
Other loans types such as the FHA loan will require you to carry the insurance for the entire lifespan of the loan.
Now you can always refinance your loan to get out of it, but that could cost you several thousand dollars to complete.
Buying a home for the first time can seem like a very daunting task but it does not have to be if you plan properly. Go into buying a home with your finances in line, a plan with what you are looking for, and your vigilant eyes on.
Now there are so many other things to watch out for in a home such as a possum dean under the deck but these are big ones that were most talked about.
What advice would you give to a first time home buyer?
Looking for some more money to help support projects at your new home? Well, check out our Ways to Make Money page. Here we walk through some side hustles we have personally tried out so you can find one that works best for you.
Join Hundreds of
Wallet Squirrel Subscribers
Did you like the content? Join our mailing list to receive the latest tricks Andrew and Adam use to make/save/invest money!