As we all grow older, we start to think about some major things we want to achieve as part of our journey. There’s no doubt that one thing that most young people have as a dream is the purchase of their first property. Whether it’s a tiny apartment or a four-bedroom house with double garage, the joy of owning one’s own ‘crib’ can be quite a thrill. As with anything in life though, there are always risks to be aware of and factors to consider. Courtesy of Lifehacker‘s Melanie Pinola, here are a few things to think about before you buy a house.
It’s impossible to be too prepared when buying a home—probably the biggest purchase you’ll ever make. If you’re thinking of becoming a new homebuyer, make sure you’ve got the following ten tips in the bag.
10. Decide Whether Buying a Home Is Worth It
Although it’s more than just a matter of dollars and cents, right now, in most major cities, buying a home is 35% cheaper than renting. There’s no right or wrong answer for everyone, though—home buying comes with a number of benefits (and headaches), but so does renting—so you’ll have to weigh the pros and cons for yourself.
9. Know How the Home Buying Process Works
When you’re sure you’re ready to buy a home, the first thing you’ll need to do is learn everything you can about the process. There’s a lot to know, but our start-to-finish guide on the subject will walk you through the basics. There are some things that you might not know: don’t think of your home as an investment, don’t buy if you won’t stay put, don’t always trust a buyer’s agent, and don’t get emotionally tied up in the process (be prepared to walk away).
8. Beware of Fixer-Uppers
A fixer-upper house lets you buy a home in a neighborhood you might not otherwise be able to afford—if you’re willing to invest in renovations, whether DIY or leaving to the professionals. These are risky purchases, however, since you don’t want to end up with a money pit. Among the biggest money pit areas: the basement and foundation. Try getting an inspection after it rains, too. Every home buyer should get a good inspection and be prepared with the responsibilities of working on the house (it doesn’t end!), but when buying a fixer-upper, these are particularly important.
7. Learn More About a Prospective Home You Want to Buy
When you’ve found a home you’re interested in, you’ll want to learn as much as possible about it before putting in a deposit. Ask your agent how long the property has been on the market —if it’s been on the market for months with no offers, it could be overpriced or it could be a slow market. Also ask for copies of utility, insurance, and tax bills so you truly understand how much the home will cost. Look up the sales history of a home to find out how much it was previously purchased for and how long previous owners stayed in the property. These can offer some clues on the property’s history, but keep in mind that sometimes homes are sold at reduced prices for other reasons than low value.
Also, don’t just think of individual properties—neighborhood matters a great deal as well, if not more than the house itself. You can research neighborhoods from the comfort of your current pad. Be sure to look up school quality ratings, too, as they’re often an indicator of the quality of the neighborhood.
6. Juggle Difficult Buying Situations
Buying and selling a home at the same time can be tricky. You have two options: focus on selling first or on buying first. If you’re self-employed, qualifying for a mortgage requires more work than if you’re an employee. Make sure you have your paperwork in order.
5. Save Up for That Down Payment
Although it’s possible to buy a home without a down payment, you’ll get a better rate, smaller mortgage payments, and be able to qualify for more loans if you can put 20% down. Start saving for the down payment as soon as you are thinking about buying a home. And don’t forget you’ll have hefty closing costs to save up for and cover as well.
4. Get Your Credit and Finances in Order
In addition to saving for the down payment, getting your finances in shape will make it easier to qualify for a mortgage and get the lowest rates. The basics: keep paying your bills on time (especially your rent), check and monitor your credit, and don’t make any major purchases or credit mistakes. If the monthly cost of home ownership is going to be greater than what you’re paying now in rent, try living on a new homeowner budget to make sure you can afford it.
3. Look Out for Deal Breakers
In addition to having your own “must have and want” checklist when buying a home, put these six potential deal-breakers on your need-to-know list: a roof that needs replacing, a home in a high-risk flood zone, issues with sewer lines and other plumbing, restrictive local zoning rules for home improvements, an electrical system that needs updating. While walking through the home, look past attractive finishes like high-end counter tops and look for signs of possible big problems, things like cracks in the foundation or water stains on the ceilings or walls.
2. Buy Less House Than You Can Afford
Many online calculators tell you how much you can afford, based on your current income and debts. It’s best if you can aim for a house even less than what the calculators tell you so you don’t end up house poor.
1. Take Your Time
When you’re looking for a new home to buy, it can feel like you’re pressed to make an offer on any home you’re interested in right now. Relax and take your time shopping around for this major move until you find the home that you’ll love living in for years to come. Shop around for mortgages too, as well as homeowners insurance. When you’ve found the home of your dreams, but it’s already under contract, you can still make a backup offer on that home.
Tips that apply to the US context have been edited out but, for the original article, click here.