Buying your first home?
So you’ve decided to bite the bullet and make what may be the largest investment of your life so far. Congratulations! Buying your first home is an exciting prospect but it can also be nerve wracking! Here at the Susan Brack Team we understand this and are here to help guide you every step of the way along this unfamiliar process. Here are some things to consider for first time home buyers.
1. Decide how much house you can afford.
This is often the first question people ask themselves when they’re thinking about buying a new home. Actually, your lender decides how much you can borrow but you decide how much you can afford.
Lenders are careful, but they make qualification decisions based on averages and formulas. They won’t understand the nuances of your lifestyle and spending patterns quite as well as you do. So, leave a little room for the unexpected – for all the new opportunities your home will give you to spend money, from furnishings, to landscaping, to repairs.
Historically, banks use a ratio called 28/36 to decide how much borrowers could borrow. An approved housing payment couldn’t be more than 28 percent of the buyer’s gross monthly income, and his or her total debt load, including car payments, student loans, and credit card payments, couldn’t be more than 36 percent. As home prices have risen, some lenders have responded by stretching these ratios to as high as 50 percent. No matter how expensive your market though, we urge you to think carefully before stretching your budget quite so much.
Deciding how much you can afford should involve some careful attention to how your financial profile will change in the upcoming years. In the long run, your own peace of mind and security will matter most.
2. Create a home wishlist.
Even before you begin to search for a home, it’s important to put together your WISHLIST! Take some time to reflect and consider what it is you’re really looking for in your next home. The options are endless and putting a pen to paper to create a wishlist will help you to zero in the right home quickly.
- Age: Do you prefer historic properties, or newer ones? Somewhere in-between?
- Style: Do you have a preference for ranches, bungalows, or another style of construction? Brick, stucco, stone?
- Bedrooms: How many? Do you need a bedroom on the main level? What about a master suite on the main level?
- Bathrooms: How many?
- Living and Dining Areas: A traditional, formal layout, or a more open, contemporary plan?
- Stories: How many?
- Square feet: How much space?
- Kitchen: What’s most important to you? Size, updates?
- Storage: Big closets, a shed, an extra-large garage?
- Parking: How many cars?
- Basement or slab?
- Fixer-upper or move-in ready?
- Outdoor areas: Do you want a big yard? For what purpose?
- Outdoor extras? Do you want a pool, hot tub or outdoor kitchen, fireplace?
- Amenities: do you want a swim/tennis community? Clubhouse? Gated? Golf? Lake?
- HOA: a neighborhood with strict covenants or no HOA at all?
- Size: now big of a neighborhood do you prefer?
- Active adult community (55+)?
- Close to shopping and transportation? Hospitals?
- Walking distance to restaurants/shopping?
- School districts?
- City, suburban or rural?
- Close to outdoor activities – parks and recreation?
3. Choose where you want to live.
Where you buy not only affects your lifestyle but also affect the home’s current and future value. As your agent I’ll be able to conduct a targeted home search if you can outline your preferences in home features, neighborhoods and nearby amenities. Here’s a checklist of items you should consider and communicate to your chosen real estate agent.
- Urban, suburban or rural
- Commute time
- School districts
- Desirable neighborhoods
- Proximity to the airport
- Proximity to restaurants and shopping
- Access to major highways and thoroughfares
- Access to public transportation
- Health care facilities
- Parks and recreation
- Length of time you plan to live in the home
*If you’d like to know a bit more about exactly what to expect when buying your first home, visit our “Eight Steps to Buying Your Home” guide here.