Entering my Homeowner Era
The most exciting time in a person's life is the thrill of entering your “Homeowner Era”. It's new, it's something you work towards from young adolescents, but most importantly it's an EXPENSIVE process that you need to be prepared for. Something I didn’t understand post college and getting my first job is just how much money needs to go into a home purchase. I thought, well I am making good money now, shouldn’t that be enough?
The first thing homeowners need to remember is that it is important and almost always required (depending on your loan type) to put down a down payment on your home. Minimum is 3% of the purchase price, but anything under 20% and you add the additional cost of PMI (Private Mortgage Insurance).
Next, homebuyers need to remember that when you finally have that downpayment ready, and maybe a little extra for an EMD (Earnest Money Deposit), you will have to pay for some closing costs associated with the property. Depending on your agent’s negotiation and the Sellers ability to help, this number can be VERY costly to a buyer.
Lastly but in my opinion the most important, is that when you do finally close on your home, it's yours to maintain. Anything that should arise from the day you get the keys and onward, it is on you to pay those expenses. And trust me, those add up very quickly.
TIPS WHEN ENTERING YOUR HOMEOWNER ERA:
Talk with your agent and lender on what you are comfortable spending, not so much what you qualify for because there could be a difference
Make sure you get an inspection on the property you are purchasing. This is the only way to protect yourself against issues that may arise with the property which could help with negotiating
HAVE EMERGENCY MONEY. Things can add up quick, homes are an expensive purchase. The cost of a new roof can run upwards of 20k, and these are costs most first-time home buyers are not ready for
Most importantly, have fun with this process. You don’t want to stretch yourself too thin just trying to get into any home you can. Take your time, and use your agent. They are there to protect you and give you guidance to make sure you are confident as you enter into this new stage of your life!
