Few Questions To Ask Before Searching For Your First Home
loader
Answers

Few Questions To Ask Before Searching For Your First Home

EPF July 9, 2019

When looking for your first home, the search can be a stressful endeavour. With so many homes on the market, it’s hard to figure out which one is right for you, and more importantly, which one you can afford. But, if you jump in too quickly, you usually end up overwhelmed and disappointed. Maybe you end up paying too much for the property or maybe you miss minor details that after moving in, aren’t so minor anymore!

So, before signing on the dotted line, ask yourself four questions first.

How Much Can I Afford To Spend?

It may seem obvious, but many first-time home buyers assume they can afford much more than they actually can. Start by analyzing how much you currently pay in rent. The figure acts as your starting point to determine how much you can afford to pay on your mortgage. Remember, spending more than 30% of your monthly income on your mortgage is stretching it. But, if you have excess money saved, you may be able to swing it.

After you have the baseline number, now you need to add the extras. As a homeowner, you need to pay property taxes on top of your mortgage. You also need to purchase homeowners insurance. As well, you need to spend roughly 2% to 5% of the homes selling price on maintenance and repair costs each year.

Another issue is heating and electricity. If your previous residence was smaller – or if you were living in an apartment where utilities were included in the rent – you may be shocked at how much extra you need to spend.

Should I Use A Realtor?

A lot of first-time home buyers are torn between hiring a real estate agent and conducting the search themselves. But, because agents usually receive their commission from the seller, their services are often free to use.

More importantly, agents can provide guidance throughout the entire process. They have a solid understanding of the neighborhood and can share detailed blueprints and legal documents that allow you to avoid any major surprises during the closing.

Which Neighborhood Is Right For Me?

In real estate, location is everything.

And depending on your lifestyle, you want to find a home that’s near amenities that you enjoy. If you’re an outdoor person, look for a property near a park or one that has plenty of greenery. If you have young children, you want a place that’s near schools, day care and transportation services.

After you find a neighborhood that’s right for you, test it out during various times of the day. If you only see the neighborhood during the weekend, you may not realize how residents behave during the week. Maybe there’s a ton of traffic or noise during certain times of the day. Or maybe teenagers hang out close by on Saturday nights. Either way, conducting a thorough search means you won’t have any surprises down the line.

Another critical factor is resale value. If you plan on selling your home at some point, you want to be sure there is an active resale market. Run through a few comparable sales and analyze how long homes are listed before they finally sell.

What Is My Time Horizon?

Because amortization is low in the first few years of homeownership, you need to live in a house for at least five years to see any kind of return on your investment. Thus, make sure your time horizon fits your needs. When you factor in closing costs, legal fees as well as moving and storage costs, you may end up losing money if you jump ship too quickly.

Elite Personal Finance

Recommended Articles

Debt

How To Control Of Your Finances

EPF July 11, 2019

Getting your finances in order can seem like a daunting task. Budgeting. Saving. Investing. Most people would rather go to the dentist than come up with a financial plan! But, by peeling back the layers and taking a cold hard...

Debt

Few Questions To Ask Before Searching For Your First Home

EPF July 9, 2019

When looking for your first home, the search can be a stressful endeavour. With so many homes on the market, it’s hard to figure out which one is right for you, and more importantly, which one you can afford. But,...

Privacy & Security

Privacy and Security

Elite Personal Finance takes your privacy very seriously.

We always use a secure and up-to-date SSL certificate to provide a private connection to our site.

Learn more

We have a very transparent privacy policy.

Learn more

We help you to be safe online by writing guides on safety, security and identity theft.

Learn more

In addition, we collect only minimum and necessary personal details on our site. In brief, visiting our site is ultimately safe and secure. However, we have to say that no one can be 100% secure online.

AS SEEN ON