Buying your own house continues to be the best path to financial security for most people. And there are arguments for buying your first home before you are thirty. You build equity sooner, you pay it off sooner, and you avoid throwing money away on rental property that may or may not be well maintained by the owner. Couples who are about to be married should definitely think of buying a home.
Buying your first home can be both exciting and scary. Here are some tips for buying wisely and moving in without arguments.
Have the down payment lined up
If you don’t have twenty percent of your purchase price, you are probably not ready to buy. Lenders have learned their lessons from the foreclosure crisis, and lending is a lot more cautious than it was ten years ago.
Some young couples get a down payment from their parents as a wedding gift. This is one of the best things a parent can do, so don’t be proud. Accept that kind offer.
Become an expert in the neighborhood you want
From an investment point of view, the best neighborhood is one that is up and coming. These “transitional” neighborhoods are often the “cool” neighborhoods where young people live.
Compare the number of recent sales and the number of houses currently on the market in the neighborhood you like. These numbers should come close to matching or the sales should outstrip the inventory. If there are thirty homes for sale and only three recent sales, take a pass on that neighborhood.
There is also no substitute for taking a lot of walks around the neighborhood you are interested in. While you are walking, take note of how many boarded up or abandoned houses there are, if any. Also note the number of for sale signs. Too many is not a good indicator. Look for repairs and renovations. A neighborhood where people are remodeling and maintaining their homes is a better investment.
Most real estate websites have crime maps. Consult these maps to determine if the neighborhood you like is really safe. If it’s not, that will negatively affect the resale value of your home. Experts also think that you should buy in a neighborhood that has a chain coffee shop.
Rein in your agent
It is true that having a real estate agent is an asset, especially when it comes to the paperwork and closing. However, agents can be very pushy, so you need to be able to tell your agent no. If an agent pressures you to make a higher offer than you think is wise, you need to just say no. If he recommends a house you don’t like, just say no. Keep in mind that agents are good at sales; they don’t necessarily know the real estate market better than you.
There’s no need to bring in an agent until you have done your research, picked a neighborhood, and possibly even the house you want. Your agent will be very nosey about how you plan to pay for the house. Unless you have enough cash to make an outright purchase, it’s a good idea to get mortgage pre-approval from a bank in the early stages of house hunting.
Should you buy a foreclosed house?
A foreclosed home can be a good value if you do your homework. Consider the neighborhood. If it is an established neighborhood or an up and coming one, this purchase could be a good investment, especially if you have the energy to paint, caulk, and tile yourself. For HUD homes, go to www.hudhomestore.com.
Make move in a breeze
Both bride and groom should notify their banks, post office, doctors’ offices, debtors, and magazine publishers about the new address. If you are leaving apartments, be sure to give your landlord thirty days notice of your move, and clean carefully. You will need that security deposit for unforeseen expenses relating to home purchase.
Consider hiring a mover and even packers if you can afford it. There are a number of local services that provide a couple strong men and a truck for short moves. This may cost less than you think, possibly less than $500 if you play your cards right. And it will take a lot of stress and conflict out of your brand-new marriage.
Whether you’re moving into a luxury home or a cozy cottage, a home purchase may well be the best financial decision you ever make. If you buy a home you can afford and you love living in it, it will be a good investment, no matter what.
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