Buying a home is a huge commitment, and the preparation necessary to navigate the purchase process efficiently and successfully is more detailed than many people realize. Home buying rates are steadily increasing in North Carolina, and many buyers are on the market for the first time. It’s easy for excitement and enthusiasm to cloud judgment, but being a responsible homeowner starts with the strong financial decisions you make well before you have house keys in hand.
Are you ready, emotionally and financially, to make your move?
Many first-time homebuyers compare their monthly rent to that of a mortgage payment. While it may be true that a mortgage payment would cost less than your current monthly rent, you’re only looking at a percentage of your monthly expenses. You must factor in costs beyond your mortgage and down payment associated with homeownership. From landscaping to fixing major appliances and exterminating costs to seasonal exterior maintenance, you must ensure you have funds available in the event of an emergency. Additional costs are especially easy to overlook when you haven’t had to worry them about while renting, and planning for them now will lead to a more healthy and stable financial future.
Young professionals often wonder how student loans and car payments affect mortgage approval. The good news is that those lower-interest debts are generally manageable alongside a mortgage payment, and you’ll be in a good position if you’ve made your payments on time. Regardless of your financial situation, include those costs in your forecasting. There are plenty of major loan types available to you. But a mortgage, while a great investment, is at the same time a huge responsibility.
While diligently saving your paychecks is commendable, the majority of homebuyers will need financing to afford today’s home prices. As always, you must be realistic with how much you can afford. There is nothing worse than finding all of your must-haves in a home that is out of your financial reach. Regardless of how much you have saved in the bank, Network Realtors require first-time homebuyers to speak with a mortgage professional to ensure preapproval. Preapproval is the process of working with a lender to give you an idea of the mortgage amount for which you qualify. Preapproval will help you and your Realtor make informed decisions and put you in a better position to make a serious offer when you do find a home in the appropriate price range.
Many homebuyers buy as much house as they can afford according to what lenders offer them, which is usually on the higher side of what is financially manageable. And with Network’s experience and connection to the Wilmington area, our Realtors can connect you with honest and trustworthy lenders who also have your best interests in mind.
You may have heard that the longer you stay in the home, the better off your investment. This is true. Thinking long term is key to any investment – and when we say long term, we mean more than two to three years. When you buy a home, you should know that you’re going to be happy – and able – to stay put for a minimum of five to seven years. With the transaction costs of buying and selling a home, you may end up losing money if you sell any sooner. Mortgages are structured in a way that requires you to pay much more interest in the first few years of homeownership. It isn’t until about five years of paying your mortgage that you’ve made enough process on the principal to justify selling.
Network Real Estate has many homes for sale in Wilmington, North Carolina, in sought-after neighborhoods. But if you’re still unsure if you’re ready to buy your first home, spend some time determining if owning or renting is right for you. You may also be interested in the top 10 tips for first-time homebuyers. Network Real Estate can help first-time homebuyers move through the buying process smoothly and safely. Contact us today to discuss your options with one of our experienced local Realtors.