My Fiancé and I have recently begun our house hunting process and I have learned a ton already. Before we started this process it was really intimidating to both of us and we had no idea if buying a house was the right decision for us. We quickly learned that the process is nothing like on TV.
Decide if buying a house is the right move for you.
Right now we are lucky because we are able to live in his parents basement. With both of us being recent college graduates it is a big help. The rent is cheep and their is a lot more perks. Now that we are graduated and engaged we are ready to move out though. We originally thought we would rent something but quickly reconsidered after researching home for rent. The cost of rent is around $1000 (not including utilities) for the type of house we were looking for.
After finding that out we realized we could buy something for a cheeper monthly payment. I am not saying buying a house is right for everyone but we know we are going to live near where we live now and decided not to waist money renting.
So when deciding to move look in to all possibilities and decide which is best for you. We know buying is right for us at this time.
Get pre-approved for a mortgage.
Before you even start looking at houses contact a mortgage broker and get approved. We are lucky enough to have a family friend who is a real estate agent, so she recommended an awesome mortgage broker. We contacted her, emailed her with some information, and two days later got approved for a $150,000 loan.
Figure out what you can actually afford.
Just because we got approved for $150,000 does not mean that is what we can afford. Our real estate agent helped us figure out what we can actually afford. My Fiancé and I decided that we could afford a $700 monthly mortgage payment and a $5,000 down payment. This determined that we could afford a house that is roughly $130,000. We probably won’t go above $120,000 though.
Now I mentioned a down payment. Yes you have to make a down payment on top of your loan. This shows the bank you are willing to put money in up front. Most home buyers have to put a 20% down payment but usually that does not apply to first time home buyers. For first time home buyers usually a $5,000 down payment is enough but the more you can put down the smaller your monthly payment will be.
Consider all the additional expenses.
Buying a house is a major investment and involves more than just paying your mortgage every month. Something we never considered was property tax. We took a tour of the very first house we liked and fell in love. It had everything we were looking for but when figuring the monthly payment it was over our monthly budget. Since we are first time home buyers and are not making the traditional 20% down payment our property taxes have to be paid monthly. So when looking at a house look at the property taxes and determine what works best for you.
Other things to consider are utilities. Water, gas, electric, and trash all cost extra. Also location, location, location. We quickly learned that one of the cities we were looking in was expensive. The homes we could afford were not what we were looking for.
Set requirements for what you are looking for.
Working with a real estate agent can sometimes be hard. We are lucky to be working with a family friend but I couldn’t imagine going through this with any one else. Make sure you are clear about what you want in your house and out side your house. Keep in mind how long you will be living there. Our real estate agent brought up some very good points. You have to think ahead for your future and your house. Will you have pets or kids living their? Will you have family or friends come stay with you? Will you rent a room out? These are all questions to ask yourself and keep in mind when looking at homes.
When setting requirements you will have hard points and soft points. We know that if a house doesn’t have a garage then its a no. We also would like three bedrooms and two bathrooms. We have a big family so space to entertain is very important. The yard is also important to us because we will have at least one dog. This is a soft point for us. A couple neighborhoods we really like have parks and trails near by, so if the yard is smaller that is ok for us.
When looking for a house try to imagine your self in five years, it helps a lot. It completely changed our perspective of what we wanted in a house. It may also effect the location and school district the house is in.
I hope this helped with your house hunt. Please take a look around and enjoy other posts. Also leave a comment if you want to see more content like this.