First-Time Homebuyer Q&A: Part 1

By Heather Faucher | Posted on June 25, 2009 | Filed Under Real Estate 

Many first-time homebuyers know next to nothing about the whole process, and often have a ton of questions they need to find answers to.  While finding a reputable real estate agent or experienced real estate attorney can be one way to find the answers to those questions, this series of posts is going to attempt to answer some of the burning questions first-time homebuyers have as they start the process.

1. HOW DO I KNOW IF I’M READY TO BUY A HOME?

The following checklist is a great one to use to honestly assess your readiness:

–Have I had a steady source of income for 2-3 years?  Is that current income reliable?
–Do I have a solid track record of paying my bills in a timely manner?
–Do I have a limited amount of long-term debts, like car payments?
–Do I have money saved for a down payment?
–Can I truly afford a mortgage payment every month, plus any additional costs such as insurance?

If you answered yes to most of these questions, you are likely ready to at least consider purchasing your own home.  And if you answered yes to ALL of them, chances are it’s the right time to start researching and house hunting!

2. HOW DO I BEGIN THE PROCESS OF BUYING A HOME?

First do some brain-storming.  How much money can you afford to spend on a monthly mortgage payment?  How much space do you need (i.e. how many bathrooms and bedrooms, how much communal living space, how much storage space, what size of garage, etc.)?  What parts of town do you want to live in?  What school systems are you willing to move to?  Which neighborhoods do you think are safe enough for your family?  These and similar questions can provide you a solid foundation to figure out which areas to hone in on.

Get advice and tips from friends and family.  Check out the websites for major realtors in your area.  One good thing to do is take a drive on a Sunday afternoon searching for Open Houses.  You may find the perfect house or real estate agent to work with that way–my husband and I did!

3. HOW DOES PURCHASING A HOME COMPARE WITH RENTING?

This is really like comparing apples to oranges, since the two are just completely different creatures.  One major benefit to renting is that you’re absolved of the responsibility for most home maintenance.  If something breaks, all you have to do is contact your landlord of apartment manager.  Of course, the downside to this arrangement is the fact you can’t build equity, take advantage of tax benefits, or keep your rent payments the same indefinitely.  You also usually can’t paint the walls whatever colors you want or make any permanent changes or additions to the home.  And noisy upstairs neighbors–chances are you’re probably stuck with them for awhile!

Owning a home, on the flip side, brings many benefits, assuming you can safely afford the mortgage payment.  Making each payment steadily builds equity, which is a major investment.  Owning your own home also means you’ll see tax benefits come tax season.  Of course, you also gain financial responsibilities that come with home ownership, like insurance, real estate taxes, and home maintenance.  But considering the freedom, stability, and equity involved, that’s often worth it for most people!

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