When buying your first home, it is easy to get carried away by details and forget about what is really important. So slow down, take a deep breath, and think about these four things.
1. How long will you live there?
Every time you move, there will be costs. Fees for selling, costs for buying, taxes, and moving companies all add up. If you are planning to move within five years, most experts agree that you might be better off renting until you are more settled. If you are unsure about your plans, it might be better to wait to buy for another year or two.
2. What can you afford?
Setting a budget might be the most important part of buying a home. Track how much you spend every month for several months. Then, calculate what kind of payments you could afford every month. Be sure to leave some extra money for unexpected expenses. Even newer homes frequently need some repair, and new homeowners often need to buy things like tools for the house and yard.
Now think about your downpayment. Remember that some of your savings will go to pay for closing costs like realtor fees, a lawyer’s fees and taxes. Now consider how much you are comfortable borrowing. Reference your earlier calculations about what size of payments you can afford, and be sure to allow for the chance of rising interest rates in the future. Remember that you do not have to borrow as much as the bank will allow!
3. Where do you want to live?
Many people underestimate the impact the location of their home will have on their quality of life, so begin your search by considering the location. On a map, mark important locations such as work, schools, recreation areas and shopping. Then narrow down acceptable locations by how much of a commute to each place is acceptable to you. Remember that living near work can save you money if you will not need a second vehicle. If you have young children or are planning a family, do n’t forget to consider if there are schools nearby. Once you see what you want to be near, you can narrow your search down to a few neighbourhoods. This will save you time when you start looking at houses.
4. How much space do you need?
Although it is tempting to go for the dream home right away, think about how much space you need. A large yard is nice, but weeding and mowing can take up half of a sunny Saturday. A big house with five bathrooms feels spacious, but it uses much energy, and somebody has to clean all those bathrooms. Buying a house that is no bigger than you need will save you time and money, as well as stress if you stretch your budget for the extra space.
If you think you might need more space in the future, consider buying a house that can grow with you. Maybe you can finish a basement or attic in a few years to add an extra bedroom, or maybe there is an extra bedroom that you could turn into the spacious ensuite you want.
Once you know what you can afford, what kind of a house you want and where it should be, then it is time to begin looking at homes! This is the fun part. Take your time, don’t let anyone pressure you, and good luck!