Antoine Collomba - Real Estate Agent

Let's talk

http://antoinecollomba.omgbrokers.com

4 Tips for First Time Home Buyers

Being a first time homebuyer can be an incredibly stressful. However, the more you know before venturing into buying property, the better chance you have of coming out on top of the situation. While there is never any way to predict the future, there are always ways to prevent the worst case scenario. The following 4 tips will help you do just that.

Map Out Your Monthly Bills

Make sure you understand all of your bills before you buy your first home.

Some people venture into house buying thinking, “Ok, we make $3,000/month. All of our monthly bills come to $1,500, so we can afford a $1,500/month mortgage.” Frankly, this just isn’t smart thinking. In fact, the typically rule of thumb is that you should not spend more than 28% of your monthly income on a mortgage payment. In this situation, 28% of $3,000 is $840. Now realistically speaking, $840 will not get you far, so you may have to roam out of this comfort zone a bit. However, spending 50% of your monthly income (especially when the other 50% is already spoken for) on your mortgage is just not a good long-term plan. If any emergency comes up, you’ll be out-of-luck when it comes to expendable cash. And if you need to incorporate any new monthly payments, you won’t have any room to do so. Whatever you do, make sure your monthly mortgage payment does not set you up for failure right from the start.

Invest in working with a Real Estate Agent

A first time homebuyer should take advantage of the services of a seasoned real estate agent.

What many first time homebuyers do not understand is that working with a real estate agent does not mean you will need to spend tons of money on their services. In fact, in most cases, the way a real estate agent makes their money is through the commission they make off the sale of the house. This money will come from the person selling the house, not the person buying it. So, if you are a first time homebuyer, it is in your best interest to use the professional experience of a real estate agent for the whopping price of FREE.

Don’t Forget about Homebuyer HOA Fees

Always remember to factor in HOA fees when buying a home for the first time.

Some homes are attached to what is known as a “Home Owner’s Association.” This can be both a really good thing and a really bad thing. While a HOA can be excellent for a neighborhood in the sense that they collect funds to make the neighborhood better, they can also be incredibly expensive. It’s important to understand that you need to factor in this cost as a monthly expense. For example, say your mortgage is $900/month. Your HOA fees are $200. This means you should really consider your mortgage payment to be $1,100/month. In addition, try to keep a savings account with money set aside for any “special assessments” that may come along. This is especially important if you live in an apartment building. Special assessments can pop-up at any time for repairs to the common areas of the building, and owners within the community will usually split these costs.

 

Consider all your options when it comes to Home Owner’s Insurance

Be mindful of the type of home owner's insurance you buy for your first home.

Home owner’s insurance is required in almost every home buying experience. While there are always some exceptions, and you can lower your insurance in some cases if you put more money down, the most important thing to consider is how invested you can be in making your own home repairs. If you are a pretty handy person and can fix most home issues yourself, you can lower your monthly insurance payments by accepting a higher deductible. However, if you purchase an older home, in great disrepair, and you can’t tell a monkey wrench from a hammer, then invest in more expensive home owner’s insurance with a lower deductible. It’s likely you may need to use it more often than you’d expect.

 

These are just a few tips that every first time homebuyer should know. If you have more questions as a first time homebuyer, this is completely normal and you can always reach out to your real estate agent to help you better understand the home buying process. There are plenty of well-established agents with OMG Brokers, so reach out to them any time to put yourself on the best path to home ownership!