I’m About To Be a First-time Home Buyer: What Do I Need To Know?
First-time homebuyers are in a unique position in today’s real estate market. First-timers are older than ever, giving them ample opportunity to save for the down payment that’s required on any new home purchase. But in many instances, they are also less equipped to manage the property than previous generations. Striking this delicate balance is crucial to making the transition from renter to a homeowner as painlessly as possible, but for many, this is a hard thing to accomplish.
If you’re a new home buyer looking to make the most of the opportunity before you, this is the perfect guide for your situation. Continue reading for some great tips on how to make a move into your first home, one to remember for all the right reasons.
Create a savings plan that you can stick to for the long haul.
One of the first things that any new buyer must do is create and maintain a savings strategy that begins months or even years before approaching a lender and runs right up through the closing on your new property. As a borrower, several key factors must be taken into consideration. You will need to maintain a great credit score, show a significant commitment to your savings habit, and of course, possess enough working capital to cough up a down payment that ranges anywhere from 5 to 20 per cent, or even higher in some cases.
A savings plan that starts with understanding the financial toll that buying a home takes on you and your finances is a must for any first home buyer. The truth is that this is a hard road, but one that’s entirely worth it in the end. Once you’ve made a move to owning your own home, you begin to build equity in a property that gains in value over the long term rather than paying off the mortgage on someone else’s property in the form of monthly rent checks.
Likewise, the interest rates on home loans are among some of the most favourable that banks provide to borrowers of any kind. This means that the debt incurred to buy a home is among the cheapest you can find. But this doesn’t mean that saving goes out the window once you’ve completed the transaction.
Continue high-quality financial habits after the sale is finalized.
It’s not enough to save for the down payment and then carry on with monthly payments as usual afterwards. Maintaining a commitment to keeping at a high pace is a great way to make the transition as pain-free as possible. Homeownership comes with its own set of challenges, and many of these are in the financial realm. As a renter, you don’t have to worry about breakdowns in the piping, electrical systems, or flooring replacements.
But once you buy a home, these troubles become yours, and they can be expensive. Saving at the same rate to replenish your capital reserve for at least the first six months in the new home is a great way to usher in a new level of prosperity and peace of mind for you and your family.
After the sale is finalized, the real work of homeownership begins. New owners often forget about all the work and cash that must go into making a new property feel like home. With the threat of renovations and repairs always on the horizon, savings are a priority even after the expense of your purchase will carry you the rest of the way.
With these essential pieces of information in mind, making the most of your new home can be simple and rewarding.