Things I Wish I Knew Before Buying My First Home
When the time is right, buying your first home is an exciting experience. These are the things I wish someone would have told me before I bought mine.
Buying a home is one of the biggest purchases and decisions you will make in your lifetime. When you finally save up enough and decide you’re done renting or living at your parents’ house, the home purchase process can be as exciting as it is stressful. Like many firsts in life — love, pet, car, best friend — you always remember your first home purchase.
To give you an advantage, here are some things I wish I knew before buying my first home.
Get Pre-Approved for a Mortgage Before You Start Looking
When we started our home search, we thought we knew what we could afford. Then we applied for a mortgage and discovered how wrong we were. That’s why you must get pre-approved for a mortgage before you start to look. Otherwise, you could be wasting your time and falling in love with homes that are out of your price range.
Also, in a competitive market, you could lose out on a property if you aren’t approved for a mortgage. Make sure you know what you can afford and are also fully aware of all your loan options. As this NerdWallet survey showed, nearly half of Americas are not aware of their options.
It’s an Emotional Roller Coaster
You can experience many feelings just in the span of one week when buying a home. Having an offer accepted is exciting! Difficult sellers could make you feel angry. Or perhaps you start to fear the reality of a mortgage.
A survey conducted by Homes.com shows that about 40 percent of Americans say buying a home is the most stressful event in modern life, while 44 percent said they felt nervous throughout the home-buying process. But in the end, there’s no greater emotion than that of accomplishment, when you close on your first home!
A Good Home Inspector Is a Crucial Part of the Process
Home inspections can determine if you go through with the sale or not. They can also be one of the most stressful parts of the process as you negotiate who fixes what. You want an inspector who is thorough, but not someone who unnecessarily scares you out of buying the home.
Although we had a good home inspector, getting expert input on certain issues — like the arborist who told us the big oak tree was NOT about to fall on the house — is something you can do as a responsible home buyer.
Anything Can Happen, Until the Last Minute, to Delay Closing
Imagine a snow storm hits and wipes out power in your future neighborhood the day before your final walkthrough. Luckily, the house we were purchasing didn’t lose power. But if it had, we would have had to move the closing date, which also would have impacted the interest rate on our mortgage.
Even things like the lender needing one last bank statement, or your real estate attorney waiting on paperwork, are common causes of delay. Unfortunately, there’s not a lot you can do in those situations except stay positive and hope for the best until the keys are in your hand!
Tip: It’s important to note that some states require the use of an attorney during a real estate transaction. Even if your state does not, an attorney is often worth the price tag ($2,500 to $3,000) to ensure proper negotiation should an issue arise, making sure all paperwork is filed correctly, and to perform title searches.
Get Educated On the Fees and Closing Costs
It wasn’t until we were under contract that we realized it costs a lot of money to close on a house. Aside from your down payment, which varies by loan, you’re also paying for the home inspection (which can run more than $1,000 depending on the size of the home) and any additional inspections like septic, chimney or HVAC.
Average closing costs for the buyer run between about two percent and five percent of the loan amount. They include fees for items like the appraisal, loan application, real estate attorney, prepaid interest and more. Have your lender go over these costs with you in the beginning and ask plenty of questions!