There is so much to think about when buying your first home as newlyweds—from how much you can afford, to what type of property and where. But it can become a reality if you set yourselves some realistic goals. Here are some questions to consider when deciding if you should buy your first home.
How much do you have?
Owning your own place comes with a number of new expenses, so good money management skills are a must have. If you don’t have a budget right now, then start one. You need to know where you are financially—where your money is coming from and where it goes every month. Sit down together and look at exactly how much you have coming in, and exactly how much is going out. Only then should you decide how much you can afford to set aside for mortgage repayments.
Related post: Mortgage saving tips
How much do you owe?
Once you have your budget worked out you will be able to see exactly how much you can afford on loan repayments each month. Ask yourself important questions like:
- Can you make the loan repayments?
- Will you still have enough money for other bills and necessities?
- Will you still be able to pay off your other debts?
Also, consider that your bills may change if you move to a new area, or if you go from living with others to living on your own. If either of you have personal loans or credit cards to pay off, ensure you get control of those before even considering putting an offer on a house.
How much are you entitled to?
Home loan lenders will require an initial deposit, so do some research as to how much you will need to save prior to getting the loan. Generally, the deposit is at least 5%. It could be even less if you qualify for an FHA or VA home loan.
A lender will let you know the maximum amount you qualify for a home loan. This will vary from different lenders, so do some research. You both will need to be comfortable with your mortgage payment so having an agreed upon budget ahead of time will help. There are a number of loans you can choose from, so search the internet and educate yourself on the different loan options.
Related post: The cost of buying a house
Plan and Research
There is a lot to think about when buying your first home so research and planning are crucial. Sit down and really think about what you both want:
- Where do you want to buy?
- What type of house do you want? A condo? A home with land?
- Do you plan on having children? Make sure you consider the school district.
Buying your first home is an exciting process, but not one to rush into. Make the most of the information you gather. Do the essential ground work, and in no time, you’ll be on the way to owning your very own first home as a couple.
So, are you ready to buy your first home? If you already purchased a home, what advice can you give?
Resources for more help:
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100 Questions Every First-Time Home Buyer Should AskNolo’s Essential Guide to Buying Your First HomeHome Buying Kit For DummiesThe First-Time Homeowner’s Survival Guide
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Remember that there will always be unexpected expenses. No matter how great the condition of your home, you need to be prepared for something that will break down, usually just at the worst possible moment. Remember to build in a contingency fund to your financial planning so you’ll be able to deal with a plumbing problem, a garage door that stops working, or wind damage to the roof. Insurance does not cover everything.
Great points, Rosemary! Our sump pump stopped working during a storm and our finished basement flooded. Turns out it wasn’t covered. We didn’t have the add-on needed to cover it. Lesson learned!
First home buyers can be all set to go on a great property purchase. But they can still get overwhelmed by butterflies and panic when it comes time to sign the contract. Don’t think of this as signing your life away. Rather, if you have a great buy, think of this as signing up to a brighter future!
The bigger question that people need to ask themselves is, ‘Am I ready to be renting for the rest of my life’? If the answer to this question is no, then you’ll always find a way to buy and ultimately own your first home.
My advice would be not to spend as much as your finances say you can actually afford because you never know what will come up. You could have a major repair one month, or you could have to move. We had to move for hubby’s job and it took 2 years to sell the house, so we were paying rent here and a mortgage there. We will always love that house, though, and don’t regret buying!
Very good tips – One that I always give is just because you can afford, doesn’t mean you have to have it. Technically, we could have purchased a house that was much more expensive than the one we bought BUT we wanted to some leftover money at the end of the month, rather than putting it all in a mortgage.
Right now, we pay an extra $300 on our monthly payment and we’ll be paying off our house in 18 years rather than the 30 we thought we would!
Very helpful tips! We’ve decided to buy a new house with the interest rates and inventory still being so great, but before the market fulls swings back up (we want a good deal, of course). There’s a lot to think about/look into, that’s for sure!
We are looking to buy, but the inventory is so low here! Thanks for all the tips!
I think your tips are really good. You can always buy a home and then realize that you can’t afford it after all, but your tips are the best precautions that I can think of. 🙂
Dawn
Great tips. Remember that property taxes go up through the years too, so make sure you factor that in as well.
Great point Cecile! This is something we are running into this year…big jump in our taxes, ugh!
Make sure you can afford it and you’ve factored in ALL costs! 🙂