When you’ve been renting a home for many years, the idea of owning your own space is tempting. You’ll have the freedom to paint, decorate and customize the property to your needs. However, owning a property is entirely different than renting space out. Ask yourself these critical questions before buying your first home. You’ll be happier with the decision when you’re prepared for your new future.
1. Why Do You Want To Own a Home?
There are many reasons why you may want to own a home. You might want a primary residence or a future rental property. Consider the main reason when a first mortgage is your goal. With this information, you can narrow down a property size and matching home loan. A growing family needs a slightly larger home than they have right now with a relatively long mortgage term, such as 30 years. A home that’s meant to be rented can be small with a short-term loan, such as 10 or 15 years.
2. What Is Your Budget?
It’s easy to drive down the street, and pick out a random home that you admire. However, your budget may not fit a first mortgage that’s required on that particular property. Pull together your finances, and compare your assets to liabilities. You may also visit DC mortgage lenders who can also narrow down your buying budget. By understanding that you can afford a home in a certain price range, you can narrow down those choices in the neighborhood. As a result, your monthly payments will be easily managed along with your other expenses.
3. Are You Ready For Extra Household Costs?
When you rent a home, your monthly payment might include utilities. Homeownership is much different so you’ll need to think twice about these extra costs. Association dues, water, sewage and general maintenance costs can add up for any household. The structure might be brand new, but it still has costs that will pop up over time. Mortgages also have fees and closing costs that will also raise the monthly payment. Ask your lending professional about a breakdown of prices so that you aren’t surprised by any fees.
4. Do You Understand Available Home Loans?
Buying a home for the first time requires a substantial down payment. Ideally, you should pay as much as 20 percent of the property’s price upfront. Most new homebuyers, however, can’t afford this amount. Instead of a conventional loan that normally involves a 20-percent down payment, you can look toward an FHA loan. These lending packages allow you to put down about 3 to 4 percent as a suggested amount. Although you’ll have higher payments, you can get into the home right away instead of saving more for the initial down payment.
Your best resource for any real-estate transaction is an experienced agent. Look up reputable DC mortgage lenders when you’re ready to make that next step. Homeownership is a rewarding challenge in life that allows you to build wealth and buy other properties in the future. Explore your personal and financial obligations so that you can buy that first home today.