Tips to purchasing your first home.
With a housing recovery seemingly on its way, mortgage rates still low and home prices at a reasonable price, real estate experts are saying now is a positive time to make a first home purchase.
Unfortunately, it is not that easy for young singles and couples to purchase their first home. Compared to the boom market days before the recession, it is a lot harder to buy your first home now. A good idea is to have a debt reduction and savings program in place. Although it could take a year or two to complete, you will then be in a position to meet the expense of purchasing a home.
Here are some questions to ask yourself: Are you willing to reduce your spending and cut debt to buy a first home? And are the sacrifices worth it?
If you have steady employment and are certain to stay in the same area for at least five years, you are better off buying than renting. If you do have the opportunity to purchase your first home now with a fixed rate mortgage and in a neighborhood with rising prices, chances are you’ll do better owning than renting. This is because you will have better control over your living costs and don’t risk the chance of facing rising rents in your area.
If you are young and wish to buy your first home in the near future, we would like to share a few tips:
Review your current financial picture carefully. It may seem obvious but it is important to avoid out of control spending. First analyze where your money has gone. Categorizing your spending for the past three to six months will help you with this.
Create a spending plan which meets your basic and top priority needs while still letting you save for a first home. Scrutinize every category of your spending in search of possible reductions. Expenses like car and restaurant bills usually can be thinned out a bit.
Ask yourself if you are willing to change your transportation spending. Is it possible for you to get rid of one of your cars and take public transportation to work? Are you paying for a gym membership you never use? Try cutting your energy use by seldom using the air conditioning unit. Ask yourself how much you spend eating out every week.
Reduce credit card debt. Student loans cause many people in their 20’s and 30’s to accumulate substantial credit card debt. Being serious about owning a first home means living on plastic is not going to work anymore.
Don’t let others talk you out of buying a first home if that is your goal. If you have the courage to buy soon and choose a place in a solid neighborhood, you should see tangible benefits within three to five years.
Do you have questions about home ownership and need a hand to help you through the process or purchasing your first home? Talk to us, The Lawhead Team. We would love to help.