7 Best tips for the First-Time Home Buyer
Here are seven bits of wisdom from economists and financial planners for anyone contemplating purchasing their first home:
- 20% Down Payment: The safest way to purchase a home is to put down 20% on a fixed-rate, 30-year (or less) mortgage.
- Borrow Sensibly: Don’t become overconfident about potential income growth. Even though buyers in their 20s and 30s will likely see their incomes grow more quickly than previous generations, it is important to act sensibly when borrowing.
- Family Planning: Anyone thinking about expanding their family should calculate whether they could live on one income, because having both halves of a couple work may turn out to be impractical. So when looking for your first home, consider how much you can afford to put towards your mortgage each month, on just one income.
- Home Maintenance: Include a maintenance budget. Even new homes will need upkeep and repairs.
- Starter Home: Buyers who can’t afford their dream home now should opt for a starter home where they will be able to save money each month for what they really want.
- Additions & Renovations: Consider purchasing a property that can be expanded and improved upon down the road when finances are available.
- Confidence: No two buyers are the same, but feeling confident about the loan they enter into, no matter the size of the mortgage, should be shared.