You will always remember the first time you bought a house and how it felt, however, such a step needs a list of first-time home buyer tips or as some might call it first-time home buyer checklist. Since you will have to make a lot of smart decisions and research.
We looked deeper into what a first-time home buyer really needs and what are the things he must take into consideration. Please keep reading to know all about our first-time home buyer tips and checklist.
Saving for a down payment or cash
A down payment is 20% of the loan or more to cover the cost of the house. You can do so by creating a savings account or using assets such as your car or gold to keep saving without spending money on non-essential expenses.
Are you ready for a loan commitment?
It’s significantly important to make sure you can pay for your mortgage since the average term for a mortgage loan is between 15- 30 years.
Then it’s a big commitment to buy a house so you need to make sure that you are ready. You, also, must ask yourself the following questions:
- Can you commit to this house and city at least for 5 years?
- Do you have an emergency source of funds for covering at least 3 months of expenses?
- Do you have a stable income?
So if you answered one of these questions above with no, then you must reconsider your decision or delay it a little.
Stick to the budget
You might be excited and driven by emotions especially when you are a first-time home buyer so It’s likely if you don’t stick to your loan budget you might end up not being able to pay for extra expenses, or not even paying for the house itself.
Never go over the budget for a house unless you can afford it because some issues might come up or you might need money for repairs later on.
Other closing costs
The down payment or even cash payment is not the only expense you have to pay for. There are some other expenses you should consider.
You will probably end up paying from 2% – 5% of total property cost or loan for closing costs. Here is a list of some of the other costs:
- Appraisal costs.
- Attorney’s fees.
- Escrow fees.
- Insurance fees.
Loan options and preapproval
If you’re planning to pay for your house with a loan, then you must choose the right option and get mortgage reapproval before you look for a house.
Different loans have different amounts of down payment, repayment of the loan period, and the type of home you can buy.
Each option has different rates, fees, and requirements you must meet. You can compare different lenders offering the same loan to compare fees, interests, and costs for each If you have it all in your mind, then invest in your savings account and make the move.
Negotiate the Offer
Sellers choose the price they want but it doesn’t mean it’s the price they will eventually get when selling the property. Negotiating will serve you in all ways since you will try to get the price you want.
However, you might get the deal or you may not. It actually depends on your negotiation skills, the final price of the property, and the seller himself/herself.
Don’t pay more for the wrong property
You can also use our website Bayut.sa to find the right place for you to compare prices. Or you can hire an agent since an agent will provide you with sold properties in the last 3 months that have a similar price, condition, and location.
The list will help you know the cost of the property and avoid paying extra money for the wrong property or a property that isn’t worth the money. An agent will also help you do the following:
- Show you properties that fit your needs of the location, price..etc.
- Help with making the decision about the real cost of a property.
- Create an offer on your behalf.
- Make the right negotiations with sellers.
One of the most important tip of first-time home buyer tips is to work with a home buyer agent, not the seller agent. Save original copies of documents
You might get too excited when moving to another home especially if you are a first-time home buyer or you might keep digital documents and paperwork only.
However, we urge you to keep a physical copy of the ownership documents, deeds, mortgage statements..etc, in a safe place. You also need to let named people on your loan know where the documents and papers are for cases of emergency.
In this article, we included all sides of the first-time home buyer tips, or first-time home buyer checklist and what are the most important things to take into consideration when buying a house. I hope you enjoyed reading this article. If you did! Why don’t you read the other article Buying versus renting property: which is right for you? and other articles about different topics on our Bayut blog KSA. You can also leave a comment in the section below if you have any questions for us.
