Buying a home for your new family is one of the best decisions you can make. Not only does it give you a place you can call your own, but you have the opportunity to create memories and change the space so that it works for you. However, when it comes to buying a home, there are some things you’ll need to consider—especially as a new parent and a first-time homebuyer.
Work with a Realtor
When you work with a realtor, you have access to a professional who can answer any questions that might arise. They also have experience and connections to find homes that will fit your needs and budget. They are an invaluable asset when it comes to finding homes in the right neighborhood and negotiating on price.
Of course, not all realtors are created equal. Thus, you want to find someone who has your best interest in mind. If you are looking to buy in the Phoenix/Scottsdale area we couldn’t recommend The Kay-Grant Group more. Below are some ways to know you have a good realtor:
1. They Listen to You
A realtor who listens to your wants and needs and knows how much you can spend is going to serve you well. They shouldn’t show you houses that are outside of your budget or in neighborhoods that you don’t want to live in—this wastes a lot of time.
In addition to knowing your likes and dislikes, they should also know how you like to communicate. If you prefer talking on the phone to texting (or vice versa), they should adapt to your needs. Having a real estate agent who listens to you can make the house-buying process less daunting and stressful.
2. They Are Honest
Not only should the realtor listen to what you have to say, but they should also be honest. This includes answering all your questions and letting you know if your wants and needs aren’t realistic. This ensures that you know exactly what to expect from the process and the ability to find a house that you can make into a home.
While it’s good to have a list of the things you want in a home, the chances of finding a house with all of those items are slim. You are going to have to compromise on something. Having a real estate agent who lets you know this upfront is beneficial, and they can help you find houses that will work even if they aren’t perfect. If there is something wrong with a house, they should let you know. They should be worried about getting you into a good home, not making as much money as possible.
3. They Should Know the Local Area
The world of real estate can move incredibly quickly, and if houses are in high demand, they may not be on the market for very long. Working with a realtor who knows the local area and has connections will improve your chances of looking at and putting in offers on houses before others get them.
Develop a Realistic Budget
When it comes to buying your first house, not only should you be working with a professional who can answer all of your questions and want to help you find the perfect house, but you also need to set a realistic budget. The last thing you want is to lose your house because you can’t afford it.
It’s no secret that houses are expensive, but their location and demand also play a role in the market. Thus, if you live in an area that has a high demand for houses, you may find that they are expensive and many people are bidding on them. Conversely, you can live in an area where there is ample housing, which means you can get a lot more for your money.
When it comes to buying a house, it is recommended that you don’t spend more than 28% of your gross monthly income on housing expenses. You also shouldn’t exceed 36% in total debt, which would include the house payment, car expenses, student debt (if you have it), credit card payments and insurance.
To determine your budget, the first thing you need to do is figure out how much money you and your spouse make. From there, you will deduct your current payments, including your current bills. You’ll also need to figure out how much you want to pay for a down payment, as well as estimate how much utilities and insurance for the home will be. Crunching these numbers will help you figure out how much you can afford each month.
Check Your Credit Score
In addition to setting a realistic budget that you can comfortably afford, you also need to make sure you have good credit. While you may not necessarily be denied a loan because of bad credit, having a good credit score will impact the interest rate you pay. Since this can have an impact on your monthly payment, it’s better to have a higher credit score to get a lower rate.
Before talking to a financial institution to get a loan, you might consider checking your credit score. There are many places where you can do this for free. If you notice that your score could be improved, you might take the time to achieve that goal. Over time, this could save you money.
Determine the Down Payment
Unless you get a VA loan, most loans require you to put some money down. If you get an FHA loan, you may only be required to put 3.5% down, depending on your credit score. For a conventional loan, you might only have to put down 3% (again, this will depend on your credit score), but you will be required to carry private mortgage insurance, and this will have an impact on your payments.
Commonly, people contribute 20% towards the down payment of their home. The more you put down, the less your loan will be, making your monthly payments less. However, as a first-time homebuyer and a new parent, you might not have extra cash floating around. This is an area where your realtor can be helpful, and they may be able to recommend some lenders who can get you great financing and answer all of your money questions.
Find the Right Neighborhood
As a new parent, your focus will shift away from yourself to providing the best life for your child. When it comes to buying a house, you want to make sure it’s located in the right neighborhood. This could include being close to quality schools or on a quiet street. Before moving in, consider asking your realtor about the school ratings and how safe the neighborhood is.
Get an Inspection
You are investing a lot of money into your home, and you want to make sure you are getting a good deal, which is why it’s imperative that you have a home inspection done before you buy. The last thing you want is to spend a bunch of money on a house that requires repairs that are more expensive than the house is worth. An inspection protects you and your investment, so it’s worth having this conducted.
As new parents, you want to start your child’s life outright, and that can be accomplished by purchasing a new home. This gives you the space you need to grow and create wonderful memories. Buying a house has its challenges, so working with a professional and knowing what to expect will work to your benefit.