If you are a first-time homebuyer, you are in for an adventure. There will be days you wake up with a hundred questions—and you can certainly expect plenty of surprises along the way.
Going into the process, it is best to do as much research as you can so you understand what to expect. Here are 4 things nobody tells you about buying your first home and getting your first mortgage.
1. You need to be ready for the paperwork.
When you think about purchasing your first home, you may envision touring properties and neighborhoods and talking to real estate agents. But a large amount of the time and effort involved in the home buying process involves digging through your old records and dredging up old tax returns, proof of income, and so on.
If you do not have the paperwork ready, and you are not sure what you can afford, you will run into obstacles. You might find your dream home only to figure out that it is outside your budget. Or you might be able to afford it and may be ready to move ahead, only to have someone else come along and snap it up while you are still trying to find the paperwork you need.
So, do the prep work in advance to whatever degree you can. Get your paperwork in order so that you are prepared to make a move when you do find that perfect home.
2. You need to be able to look past some defects while acknowledging others.
One of the trickiest aspects of shopping for a new home is evaluating its potential. You need to simultaneously can look past fixable problems while acknowledging those which may be too expensive or demanding to bother with (or which are incurable defects).
So, think in advance about how much money you have to put into renovations, redecorating, and so on. Learn to distinguish the difference between a minor flaw and a major issue. That way you will be able to distinguish a diamond in the rough from a dud.
3. All the inspections available are worth it, particularly with an old house.
A lot of first time homebuyers are tempted to just go for one inspection. This is understandable; every inspection is a significant expense. But that does not mean you should get just one inspection. On the contrary, there are a lot of issues which can only be spotted through more specialized inspections.
So along with a general house inspection, also consider getting a plumbing inspection, an electrical inspection, a mold inspection, a roofing inspection, and so on. While these will add up, they can provide you with incredibly valuable information, and in some cases, may be decisive when it comes to whether to buy the home.
Whether you need all these inspections or not depends on many factors, among them the age and overall condition of the home. With a newer home, you may only need one or a couple of inspections, but with an older one, it makes sense to check different components of the home which may have been compromised through time or neglect.
4. There are more costs than you realize.
This is something which always bears emphasizing, because it catches so many new homebuyers off guard. When you do buy a new home, no matter how well-prepared you are, you are probably going to be surprised by just how expensive it is.
Along with the cost of the mortgage itself, you will need to pay for insurance, and there may also be homeowner’s association fees. There are property taxes to think about, and the ongoing cost of maintenance, appliances, repairs, renovations, and so on.
“But there are tax deductions, right?” There are—but not on everything. For example, there are no tax deductions on your remodeling projects (unless a home office is involved as defined by the IRS). So, a lot of those expenses will not be buffered during tax season at all.
Conclusion: The More You Learn About Buying Your First Home Before You Get Started, the Fewer Surprises There Will Be
There is no way to be 100% prepared for every aspect of purchasing your first home. It is a complex process, and no matter what you do, you will encounter some surprises along the way. Still, if you do your homework and prepare in advance, you can reduce uncertainty and avoid pitfalls—and hopefully most of your surprises will be pleasant ones. Good luck, and remember that B Home is here to answer your questions!