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How-to Pick the Right House For a First Time Home Buyer

By: MD | Date posted: January 13, 2011 (6:00 am) | Write a Comment (5 Comments)

First Time Home Buyer Tips

Are you a first time home buyer? Are you curious about picking the right house? You have come to the right place. Picking the right home can feel like a daunting and never ending task for the first time home buyer. Fortunately, it doesn’t have to be like this. With a little research and effort you can pick the right home for your unique situation.

Below are some highly practical tips to help you pick the right house when you’re finally ready.

Decide on your living space needs as a first time home buyer.

What sort of home purchase are you looking to make? Before you can start planning the perfect home purchase you need to understand exactly what it is that you’re looking for. Deciding on your living space needs will alleviate much of the stress involved in this process. You and anyone else that’s involved in the home purchase must decide what exactly you need. Do you need a small condo? Do you want a bigger home for your future family? Do you want something simple? Do you want to live in a complex? Do you want your own driveway and backyard?

You need to decide on what type of living space is right for you. This varies from situation to situation. The single dude might want a slick condo close to downtown. The married couple might be looking for something more spacious. That one bedroom condo can be perfect for you and your new wife today, but what happens if you have a child next year? Will this living space be enough? Perhaps you don’t plan on having kids for 5 years.

Once you figure out your living space needs you can move on to the next phase of picking the right home.

How much money do you have saved up for your first time home purchase?

The amount of money that you have saved will play a very vital role in picking the right house. Too often do we purchase too much home. The problem with purchasing too much home is that we might end up buying a home that is too large for our needs. This means that there will be rooms used as simply storage, the heating/maintenance costs will be higher, and property taxes will cost you more. This all goes along with the fact that you’ll need more time to pay off your mortgage. The euphoria that kicks in during the home hunt can be very intoxicating. It’s really easy to fall in love with that home that has a pool and heated garage. However, do you want to be stuck with a mortgage for longer than you need to?

Most “real estate experts” claim that you should put down 20-25% for your first mortgage down-payment. This is a great idea but you must remember that in some cities the average home can cost $500,000. This means a mortgage down-payment of over $100,000. For the young first time home buyer this can be very steep. You might have to consider starting off with a condo or moving out to the suburbs.

Your savings need to be on your mind as you search for a home. Perhaps you might find that your not totally ready yet. That’s cool. This means that you should spend the next few months looking for ways to tighten up your budget/earn more money so that you have more money for that down-payment.

Decide on the area that you want as a first time home buyer.

Are you buying for location or for the property? You must understand that the tiny downtown condo could cost you more than the spacious property out in the country. This is simply because of the location factor.

As you try to figure out which area you want to live in you should consider the following:

  • Distance to work.
  • Distance to family.
  • Will you want to start a family?
  • Surroundings in the area.

Once you check out the relevant factors and decide on your dream area, you can then feel confident knowing that you are on track to finding the right home for you.

Quick recap:

First you need to figure out your living space requirements. Then you move on to getting your savings on track. Finally you must decide on which area you want to live in. Once you’re done with these three steps you’ll be ready to make that perfect first home purchase.

Hopefully now you’re more confident and less nervous as a first time home buyer. If you have any further questions please feel free to post them here.

(photo credit: Lorena)

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5 Comments
  1. Comment by 20 and Engaged — January 13, 2011 @ 3:29 pm

    I’m hoping to be a first time home buyer this time next year, but it’s going to take a lot of hard work (and money) including eliminating debt and saving up.

  2. Comment by Ha'keuud 35 — January 16, 2011 @ 11:10 pm

    I am seriously considering getting my first home hopefully next year. And I am digging deep to getting there financially, not easy but worth the financial sacrifices.

  3. Comment by Chris — January 17, 2011 @ 3:58 pm

    Very first step when you consider buying your own home, is to discuss with a mortgage consultant what the amount of mortgage is you qualify for so you know the maximum purchase price of your new home. Price determines the limit to all other considerations.
    In Canada a CMHC insurance premium is payable if your mortgage exceeds 80% of the purchase price.

  4. Comment by Future MoneyBags — January 17, 2011 @ 5:45 pm

    A couple questions:

    Once a first home is purchased, when would you say the SM would be appropriate to implement?
    Lets say I put down 20% at first, how more equity would you think I would need before looking at the SM?

    I have very good savings habits and credit. If I did decide to stop renting, or continue to do so with my own rental property on the side, I would want the best return acheivable.

    I could get better returns with my money (with much more risk) with stocks and virtual investments, compared to the simple inflation of housing prices and the rent I would collect per mortgage payment. But if I could leverage a SM portfolio, it would make the pro’s of having a rental property outway the cons.

    Keep in mind I am quite busy with a job and business on the side already, would it be a bad idea to start a ’3rd job’ as a landlord?

  5. Comment by youngandthrifty — January 18, 2011 @ 2:09 am

    As a recent first time home buyer, it was super overwhelming.

    Sometimes I’m not sure if we bought too much “house” for a first time home buyer, but being able to have an income suite certainly helps out.

    Great post :)

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