Do you remember the feeling of jumping to the bottom of a swimming pool for the first time? You may have been scared and excited at the same time. You are taking on a new and enormous responsibility, and you want to do it right so that your home is a blessing, not a curse. To help you with any issues, we have some tips for first-time Buying a home to get you ready to go right away. Pay off your debts and build an emergency fund.
Jumping into home ownership without a plan or tips can be very tempting for buying. But you really need to make sure your financial situation is stable before thinking about buying a home. This means getting out of debt and saving up a fully funded emergency fund for 3-6 months of living expenses.
It sounds like a lot of work, but once you’re debt-free and have an emergency fund, your money won’t be tied up in monthly payments and you’ll be able to save up for upfront like never before. An emergency won’t ruin your savings either. Buying a home is stressful, but going debt-free will lower your stress levels like a day at the beach (assuming no sharks are spotted).
There are Some Tips for First Time Buying a home
1. Save, Save, Save.
After calculating your home buying budget by following the 25% rule, you really need to seriously consider saving up for upfront. Yes, 5-10% upfront is fine, but the more you save, the more homes you can buy. It’s hard work, but having a big payout can be game-changing once you start shopping.
2. Be Clear About Needs Versus Wants.
Before you get serious about buying a home, you need to clearly define your needs versus your wants. If you’re married, sit down with your spouse and make a list of your needs and wants. To be realistic. A swimming pool and a three-car garage probably won’t be enough for your first home. And when viewing a home, you may have to compromise on some of your needs and wants based on your budget.
3. Stick To Your Budget.
If you set your budget at $350,000, we can almost guarantee that the $400,000 dream home will catch your eye. And then you’ll want to start mistaking your budget. Don’t give in to the temptation to buy a home you can’t afford.
If you buy that dream home on a budget, it will soon turn into a nightmare. Paying for your home becomes a constant source of stress, and every time the house needs repairs (and it will), it feels like the end of the world.
4. Tips for new owners
Once you’ve locked the door of your home and put that fancy new welcome mat on the front door, we have a few more tips to help you prepare for successful home ownership.
Beware of fraudulent insurance offers.
Moving is public information, so once you move in, your inbox may be filled with spam offering things like home guarantees and mortgage life insurance. Throw this in the trash.
- If you’re confused about which coverage is a splurge and what coverage you really need, follow our 5-minute coverage check. Update your cover as you update your home.
- The home insurance policy you purchased when you bought your home may not protect you and your property if you are undergoing renovations. Updating your home increases its value, so you need to update your policy before trouble knocks on your door.
- On the other hand, upgrades like a new roof, HVAC system, or security system can really save you money on insurance. If you need help understanding this, contact an independent insurance agent we trust. Don’t be surprised during tax season.
- Buying a home can affect your income taxes. You can deduct your mortgage interest, and if you’re self-employed and work from home, you may qualify for a home office tax deduction.
- If you want to make sure you’re filing your taxes correctly, contact one of the recommended tax professionals. They’ll help you see if you need to make withholding adjustments now so you don’t go into debt later (or get a hefty refund).
When it comes to making the biggest purchase of your life, you really need an experienced broker who understands the market inside and out. For a quick and easy way to find trusted dealers in your area, We only recommend agents that share the same mission of serving you excellently.