Updated on May 5, 2020
Financial Hacks That Can Make Buying Your First Home So Much Easier
Buying your first home? If so, there are some financial moves you may not have considered that
could make that first home an even better investment. So, before you make your first offer, keep
the following tips in mind for a better home buying experience:
Get Started on the Right Foot
Getting everything organized and prepared before house hunting will help to ensure that you’re not spending more than you should. Start by reviewing your credit report in case there are any mistakes that could lead to interest payments. To make the loan application process run smoothly, be sure you have all your documents (W2s, pay stubs, etc.) ready in advance. You should also connect with a real estate agent and figure out how much house you can afford to help you find a listing within your budget.
When it comes to researching mortgages, FHA loans are often the best option for first-time home buyers. A PennyMac FHA loan may be ideal for home buyers who don’t have a long credit history and aren’t able to put 20 percent down.
Rent Out a Room to Cover Mortgage Costs
Looking for an easy way to offset your new mortgage? Well, if you are shopping in the right areas, you can always rent out a room in your home (or your entire home) in order to generate extra income and supplement your mortgage payments.
Now, if you decide this is the right move for your new home, you should keep a few rental tips in mind. First, be sure to check with local ordinances and any HOA rules to see if short-term rentals are permitted, or you could end up facing hefty fines, as well as creating a negative relationship between you and your new neighbors. You should also set a rental price that is comparable to other rooms available in the area, but still high enough to help out with your monthly housing payment and expenses.
Factor in Utilities and Home Maintenance Expenses
When you’re looking to make the best financial moves for your new home purchase, you have to think about all potential expenses. That means taking a look at local utility rates, so you will know how much your new home will really cost you over time. Average utility rates can clue you into your own costs, but you will also need to think about the size of your home, as well as any features that could drive those costs up. For instance, older homes may come with a lower price tag if they need work, but without proper insulation, those older homes can raise your cooling and heating bills drastically. When determining the price point for your home, you should also think about typical home maintenance costs, including emergency repairs. After paying the down payment and other home purchase costs, like moving expenses, you should still have at least one percent of the home’s value in savings to help pay for unexpected repairs.
Test Drive New Neighborhoods Before Buying a New Home
Not sure whether you will love or hate your new neighborhood, or whether you can actually afford to live there? When you’re unfamiliar with an area, it really can be hard to tell by just looking. One way you can gain first-hand experience with a new neighborhood, however, is to spend a few nights in it. Find a room or home in potential neighborhoods, and then set up some time to get to know your top choices.
While you’re there, be sure to look for signs of a good fit, such as proximity to parks, schools or local shopping. You can also introduce yourself to current residents and get their take on what makes that neighborhood a wonderful place to live. You’re likely to get some cons with the pros, but that will only allow you to make a better decision about which area is best for your new home. Of course, if you want to save on the price of that new home, you can also look for up-and-coming areas, instead of more established neighborhoods where home prices are bound to be more expensive. You can also check in with a local realtor who can advise you on which areas are the best fit for your family.
A new home is almost always a good investment. To make that investment even sweeter, however, you need to think outside of the box when it comes to finding the right home and finding ways to pay for it. Use this guide to become a savvy new homeowner, and make the most of your very first real estate investment.
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