Buying your first home is a time of stress and indecision, knowing that a single mistake has the potential to cost you thousands of dollars. The fear of making mistakes can be a mistake in itself, causing you to pass up great deals and low interest rates because of your indecision. Fortunately, there are many tips that can help the first time homebuyer get the most for their money and avoid some of the biggest pitfalls. Here are some of the best tips for first time homebuyers.
Shop Around For Homes
Before making a decision about what type of home to buy or what neighborhood to live in, you should shop around for homes in the areas that you are interested in. Doing some of your own research may help you find home styles that you may not have considered before or that you did not know were available in the area. Shopping around will also help you see which neighborhoods give you the most value for your money. Many people like to shop for homes using the internet where they can get a large amount of information quickly. If they see homes that really interest them, they can make an appointment to view it with the homeowner or agent.
Obtain Quotes From Several Lenders
Often, the first lender that gives you a quote on your mortgage doesn’t have the best deal on mortgages in your area. To make sure you are being offered the best deal available for your financial situation, obtain quotes from several different mortgage lenders like http://www.leedsbuildingsociety.co.uk before making a decision of which one to go with. The difference of a percentage point in the interest rate charged for the mortgage can save or cost you thousands of dollars over the life of the loan. Make sure that each quote is for a fixed-rate mortgage, because there is no way to predict the future costs of an adjustable rate mortgage. Websites such as will have descriptions of the different types of mortgage loans available so that first time homebuyers can see the differences between them before making their choice.
Calculate The True Cost Of Homeownership
People forget many things in their calculation of how much homeownership is going to cost them. In addition to the mortgage payment, they must also consider insurance costs, utility costs, and routine maintenance costs. If they would like a home with a large yard area, they must also include the cost of buying equipment and products to maintain that yard into their calculations. There are several online calculators available that can help you figure out the true cost of owning the home that you are interested in.
I’ve heard that a good rule of thumb for maintenence is that you should budget 1% of the value of your home on an annual basis to cover regular items, such as new roof, furnace, and other stuff that will eventually wear out. So if you buy a $250,000 house, in addition to your monthly mortgage payment, you should set aside $208.33 (or $2,500 per year). If you can’t afford that, you can’t afford the house.
That is a great rule of thumb that first time homebuyers should keep in mind. Many people do not realize how expensive it can be to maintain a home.