First-Time Homebuyer Guide
In a recent survey, 74% of Americans said homeownership was part of achieving their personal American Dream. If you are reading this, you are likely among the majority who consider owning a home among their dreams, but in order for the purchase to be the satisfying and enjoyable experience it was meant to be, you need to ensure you are mentally and financially prepared for the responsibilities that come with owning real estate.
Some people believe owning a home is similar to renting but with the power to paint walls any color desired and own a dog. While these are two of the many privileges available to homeowners, they come with the responsibilities of maintenance, a mortgage, and taxes. Preparing for home ownership requires the first-time homebuyer to take in-depth stock of finances and expectations.
Questions for Prospective Homeowners to Ask:
Why Do I Want to Own a Home?
Owning a home does not satisfy the same desires for everyone. Some homeowners buy a home for the investment potential. Others become a homeowner for tax benefits. Still others buy a house to provide stability for family members. Assessing the reasons behind a desire to purchase a home should be understood because it is not a small decision with insignificant repercussions. Real estate is almost always the largest purchase a person makes and a mortgage is a serious financial obligation. In addition, the reasons behind someone's desire to buy will help determine the best home for each buyer's situation.
Am I ready to buy a home?
Owning a home is about more than being able to decorate any way the owner chooses; homeownership requires the responsibility to maintain a home during the years of ownership, realizing a portion of an owner's income and time will should go towards maintenance and repairs. Owning a home is about being willing to take the risks of homeownership. It is also about having realistic expectations of the rewards of homeownership. The benefits of owning a house are many and the pitfalls numerous, so make sure you aware of both and not merely glamorizing the idea of owning a place you can call home.
How much home can I afford?
The best way to answer this question is to speak to a mortgage broker. The mortgage broker can provide a pre-approval letter indicating the purchase price you can afford based on the monthly payments for a mortgage, taxes, and HOA fees. Go into the conversation with an open mind and no expectations. Do not be discouraged to find your salary won't stretch as far as the home you want to own if that is the case. (This is a good reason to get pre-approved prior to beginning your search and falling in love with a home you cannot afford.)
Remember that sacrificing a huge part of your income just to pay the mortgage can quickly make homeownership a burden rather than a point of pride. You will be much happier if you buy the home you can afford now and look toward purchasing your "dream home" in the future. Follow this advise to avoid becoming "house poor" and you will be able to enjoy a social life and can afford to furnish your new home.
What is my debt-to-income ratio?
Debt-to-income ratio is taken seriously by lenders. According to a lender, overall debt should not be more than 40% of income, and housing debt should not be more than 32% of income. Before you go and start paying off debt, talk to a lender for advise on what debts to pay off and how.
What do you want in a home?
Do you like the idea of tending to a garden and spending Saturday afternoons mowing the lawn? Or does the thought of lawn care make you cringe? You could always pay a lawn care service or you could live in a condo or townhouse. Would you prefer to pay HOA (home owner's association) fees every month and have everything done for you (including having lightbulbs changed)? Would it bother you to be told when you can put out your trash or what color you can paint your house? Or would you rather live in a neighborhood with a less stringent neighborhood association even if means others can make choices that adversely affect your home value? The answers to these questions will help narrow down the search for the right type of property and the best Los Angeles neighborhood for you.
How We Help Buy a First Home
You need a top Los Angeles real estate team to work hard for you and guide you through the process. Our Realtors are devoted to helping our clients find the right home, at the best price, and with a minimal amount of stress and disruption to their lives. Our goal is to find the home that will make you happy and successful in real estate ownership.
When you hire us to help you buy your first home, we want to know what you want and how much you can afford. Your Realtor will find a way to merge these two priorities and find a residence you will enjoy owning for years. Starting with the first interview determining your requirements to the moment we present the keys to your first home, your Realtor will walk you through the complicated home-buying process. We will share our expertise to educate you on the market and the process of buying a home, so you will be prepared to make the best choices and feel comfortable with all of your decisions. Please contact us to find out more about how we can make the home buying process easier for you.
Contact a Realtor for more information about first time home purchasing.