Tips for Reaching Your Home Buying Goals
If you’re looking to buy your first home, you may be wondering how best to go about getting the home you want at the price you want to pay. These tips will help you reach your goals while avoiding any costly mistakes in the process. Read on to find out how you can make the most of your Home Buying Goals experience!
What are my home buying goals?
Decide on your long-term home buying goals, then break them down into short-term and intermediate ones. For example, you might have a goal of owning a three-bedroom home by age 30. That’s a long-term goal. A short-term one would be to buy a two-bedroom home within six months to a year, while an intermediate one would be to save $10,000 in six months. Once you’ve set goals for yourself, it’s time to figure out how much money you’ll need to reach those milestones. The first step is determining how much house you can afford—the amount that fits comfortably with your income and other expenses. You can use online calculators or even ask your real estate agent or bank representative what they recommend based on current interest rates and how much debt (if any) you already carry.
How long do I have?
It’s important to understand that there is no definitive answer as to how long it will take you to buy a home. The time between getting your offer accepted and actually closing on your house varies from one buyer to another and depends on where they live, what they’re looking for, and how quickly they can get their finances in order. Keep in mind that underwriting requirements vary based on credit score, income history, debt ratio, employment status, etc., so everyone’s timeline will look different. To learn more about what factors affect your buying timeline, read our previous post 5 Tips for How Long It Will Take You to Buy a House.
Can I afford a home?
This is by far the most important question you need to ask yourself. Buyers are often in such a rush to get into their dream home that they forget to think about whether or not they can actually afford it. Before jumping on board with a purchase, figure out your budget and stick to it; don’t fall in love with something you can’t pay for. Once you’ve made sure you have cash reserves and enough income coming in, consider factors like where you’ll be living (unaffordable markets may limit your options) and how much competition there will be from other buyers in your area, who are likely also trying to snatch up a home before prices rise further.
Where should I buy it?
There are many reasons why someone might want to purchase a home, but no matter what yours is, you can be sure that moving is an expensive endeavor. Figuring out where to buy your next home requires some research and an understanding of local market conditions. You’ll also want to consider whether it makes sense to rent or buy in your particular situation. For example, if you have been renting and plan on staying in an area for a short period of time, buying probably isn’t a good idea since you won’t have much equity when it comes time to sell. But if you know you’ll be staying put for years and there’s not much interest in rentals in your area (read: competition), then by all means move forward with homeownership.
Can I sell my current home?
If you can’t unload your current home before looking for a new one, set a price on it that’s lower than market value. This will ensure that you won’t be stuck with two homes, both of which are underwater (i.e., worth less than their mortgage balance). While getting rid of a previous home makes it easier to find and purchase another, if real estate prices continue to decline, it may be difficult to make up your losses from selling an under-market home. If you can sell quickly at market value, though, or take out a loan against its value while waiting to close on your next property in order to hold onto both homes until they rebound in value—even better.