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I think the hardest part is being honest with yourself and buying a home that you can actually afford. Everyone wants that nice house, and many will push up their budget and then the cost of owning the house made them house poor.
I eased my way into home ownership by buying a small apartment first, built equity, learnt about what it takes to own a place, and then swap into a house a few years later. I always bought one of the cheapest property in the area, but I made it nicer over time.
It happened to me and some friends told me the same happened to them. Be careful with the mortgage monthly payment. Ensure it is NOT the max you can pay. Due to escrow and taxes my mortgage went up 20% on year 2. For some friends it was after year 1, so plan for that increase!
If your bank or credit union or any other financial institution has or hosts 1st time home buyers seminars or workshops, I would encourage you to attend. They are usually free events for the attendees. Before I purchased my first home my credit union would host an annual 1st time home buyers workshop/seminar. I attended the event 3 years in a row and everything would be discussed regarding the home buying process from credit, realtors, financing, APR, interest rates, title insurance, 1st time home buyer GRANTS through your city and/or county or perhaps both in some instances, inspections, title insurance, closing cost, I mean you name it was covered during the day long seminar. By my 3rd annual seminar purchasing was a breeze.
I would like to attend a well researched seminar in which the considerations of SURVIVING a mortgage and the inflationary pressures that require creative RE-financing considerations, costs, and liabilities. There are some "self-banking" pros and cons for the non-investor that are exploited by too many to the DETRIMENT of home owners, retirees, and other challenges to financial security.
Your first house is like your first job, you're probably not going to be there in 10 years (promotions ect...) so the more it sets you up for the next one the better. If you're living in a 1 or 2 bed apartment then buy the rest of the house, so to speak. If you expand too quick you'll spend all your money on furniture to fill it. Remember you're powering, heating/cooling, and maintaining the rest of the house to so it all cost more and takes longer.
If your mortgage lender offers it, get an "offset mortgage". This is where there is a savings account attached to the mortgage account. The saving account doesn't pay interest but it offsets the interest owed on the mortgage account.
If you have any spare cash, put it in the offset savings account so that it helps towards the interest cost on the mortgage but you can withdraw it if you have any unforeseen expenses.
You can pay extra on the principle with the same effect
1. For existing homes, make sure there's a competent home inspection. Know what your walking into with utilities. Septic or sewer for wastewater. Private well or public water for potable water. Trash collection. HVAC system. What's comdition of the roof, this is a big one
2. Also look into HOA bylaws and fees
3. Closest fire station, police station, and hospital
4. Homeowners insurance rates
5. Property taxes
6. Town or City leadership. County leadership. Is there a lot of political upheaval locally?
7. School district and school board
Consider with SERIOUS Reality Checks on the TOTAL COSTS in KEEPING what you purchase. The economic paradigms are changing away from equity capture, depreciating tax credits, cash flow inventory supply-demand pricing and community selection preferences. ALL THAT is another essay; but as a general rule, don't be naive about the REAL costs of "owning" a home. FACTOR the LIABILITY Costs up front and NOT, as a fixed, maintenance number. Occupant homes are NOT the same as INVESTOR Homes and the BANKERS incentive is to masquerade those REALITIES. The list is long of all the "AGENTS" lined up to take your $ from search to move to sell and in between. THOSE are ADDED Expenses. Unless you have tidy CASH reserves safely PRESERVED, your home purchasing is like the car chasing dog biting the tire.
My bf and I were set to close on a house Jan. 31, 2000, literally days before pandemic upended our world. The process was fairly seamless, through Rocket mortgage. Until Jan. 30, when the underwriters for the loan blindsided us by pulling the mortgage offer. My bf had been self-employed and disnt have a W-2 from 2018. No amount of references, employer recommendations or any other proof would sway them. Keep in my I told Rocket he didn’t have a W-2 from ‘18 at the very beginning of the process. “No problem! You both have good credit scores, etc.” well it’s a huge problem. We lost what would now be a $350,000 house with $250,000 innequity because of a bureaucratic snag. Now we’re paying more in rent than that mortgage, taxes and insurance would have been. Make sure your paperwork is rock solid so this does not ever happen to you or anyone else!!!”
Doesn’t matter if it’s new or old the sheer number of projects and costs are staggering. The number of weekends you will spend amounts to years of your life. I think in the future as more people move away from blue collar work owning a home will be less attractive. The amount it costs to hire other people won’t be worth it. They’ll rent and it will make more sense for them. But if you have some determination, not afraid to fail there is a YouTube video to fix anything.
Believe Dave Ramsey now offers a new training for home buyers. It may be worth checking out as I'm sure they'll cover some of the financial pitfalls and best planning tips for homeownership .