- Buying a home is a complicated process, so it's important to start at the beginning and thoroughly understand each step.
If you're a first-time buyer, you should weigh the pros and cons of home ownership versus renting. There are many advantages and disadvantages to consider.
- – Renters have the freedom of mobility if they choose to move, but their monthly rent checks do not establish long-term equity or produce any other benefits.
- – While mortgage payments accumulate equity, these payments are generally higher than rent payments and come with the responsibility to manage the care and upkeep of the property.
Money matters. If you're considering a mortgage, shore up your credit and get a copy of your credit report.
- – Get pre-approved. Save yourself the time and grief of looking at houses you can't afford.
- – Determine how large your mortgage can be. Explore different loan options to determine what is best for you.
- Stay put. Commit yourself to your new home for at least a couple of years before making your next move.
Think about what (and where) you want to buy. Prioritize your needs (i.e., location, schools, amenities).
- – Consider your re-sell value. Even if you don't have school-aged kids, a strong school district is a good thing.
Do you homework.
- – Calculate the hidden costs. Property taxes, insurance, maintenance and association fees can impact your wallet over time.
- – Don't be house poor. Double and triple check to be sure you haven't maxed yourself out on the cost of your home and left nothing for maintenance, etc.
- Get help. Consider hiring a REALTOR® to help you find the home that meets both your needs and your finances. It pays to have someone who understands the local market and is looking out for your interests.