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2013-10-30 12:23:23
All buyers should read this advice

All buyers should read this advice


If you're a first-time home buyer, you're probably thrilled to take the plunge into the real estate market. After all, you've probably been envisioning this moment for many years. It's a time when you should be ecstatic for what's coming. However, there's a caveat. Buying a house is a massive decision, particularly if you've never embarked on the process before.

There are certain things you must consider as a prospective buyer in order to have a successful purchasing journey. These ideas are listed below for your benefit.

1. Properly assess your credit standing


Credit is one of the main issues you need to focus on before buying a one-way ticket to the real estate world. For one, it can really help you financially if you have solid credit. Secondly, if you have a less than ideal credit report, buying a property may be a decision to re-think or put aside for several months. Every situation is relative to the individual person directly involved, but the principle is the same: credit matters and it will continue to matter. You need credit to qualify for a loan.

While the exact influence could vary greatly between a Native American applying for an HUD 184home loan and a recent college graduate applying to take over a condominium, the numbers need to add up. If you have three credit cards and most of the allowance is used up on all three, you may not receive a very pretty score.

Take this advice and run with it: Good credit standing often translates to lower interest rates for your mortgage agreement. This benefits you. Also, if your credit isn't ideal, think about considering a six month hiatus from the housing search to try and raise it. You can do this with consistent payments on whatever you've committed to within your life.

2. Gauge monthly cash flow

Part of owning a home is being extremely stable financially. This doesn't mean having an abundance of extra money to throw around, but rather the concept of understanding how much money you do have and how you spend it. If you're considering buying a house, you want to specifically focus on your monthly cash flow. Some questions to ask:

  • How much do you earn?
  • How much are you able to put aside each month?
  • How's your individual job security? What about your employer's stability within the market?
  • Can you reasonably cut back on spending without compromising your way of life?

Your monthly flow needs to be understood for the simple reason that you need to know exactly how a mortgage agreement will affect you financially. For instance, the commitment is more than simply paying the monthly portion of the loan. You will have homeowner obligations that you didn't have before. You will have property taxes, maintenance and many other situations to consider.

Take this advice and run with it: You're going to be fine owning your own property, but it can really help to properly assess your monthly cash flow. There needs to be more coming in than going out. You're the only one that can truly understand where your balance is at and if there's ever a time to think about it, it's now.

3. Carefully consider the location

Oftentimes those people buying real estate for the first time underestimate the commitment that ensues after the closing date. While you can surely sell your house before it's paid off, it's a bigger commitment than it seems to be looking at what is often a loan of 25-30 years. Due to the inherent longevity of these agreements, it's imperative that you analyze not only the property you're deciding on but the location it's in. Some questions to ask:

  • Do you really, really like the city or town?
  • What school district zone does your property fall within? This could shape your child's or children's education
  • Is it close enough to your job? What about your spouse's, if you have one?
  • Is it near hobbies you enjoy?

Take this advice and run with it: The location that your house sits within will make or break your general happiness with the situation. This seems obvious, but it still needs to be carefully analyzed with a long-term focus. Do you see yourself feeling the same about it in a few years? What about 20? These are thoughts to toss around your inner circle of family and friends before settling on a decision.

Part of enjoying your first home buying experience is being prepared. Properly assessing your credit standing, gauging monthly cash flow and carefully considering the location of your proposed investment are strong starting points. From there, it's up to you.

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