As newlyweds, buying and settling into your first home is an exciting and nerve-racking experience. Knowing what to expect can help the process go smoothly. From budgeting to renovations, here’s your step-by-step guide to first-time home ownership.
Determine How Much You Can Afford
Before you start your search for the home of your dreams, it’s important to establish how much you can afford to spend.
Examine Your Credit
Like it or not, your credit score has a significant impact on whether you get approved for a mortgage, and it influences your interest rate. Get a copy of your credit report and scour it for errors. Do what you can to improve your score and resolve discrepancies now so when it comes time to get preapproved for a loan, your credit is in tip-top shape.
Scrutinize Your Budget
As a rule of thumb, buyers are advised to spend no more than 25-30% of their household income on housing expenses. Take a close look at your household earnings, as well as your financial obligations, like student loans, car payments and credit card bills. Then, talk with your partner and come to an agreement about how much you can spend on your new residence.
Find A Home & Make An Offer
Once you have a solid idea how much you can afford, it’s time to find a home that meets your needs, your budget and then make an offer.
Get Preapproved for A Loan
You can search online for a loan or go to the institution where you bank and ask about your mortgage options. Either way, having a preapproval letter in hand will help you negotiate from a position of strength when making an offer. Be aware that you may get preapproved for a larger loan than you expected. Stick to your budget and resist the temptation to spend more than you can realistically afford.
Find a Real Estate Agent
The National Association of Realtors (NAR) is a great resource for finding a professional real estate agent in your area. As a first-time homebuyer, you’ll benefit from an experienced agent who can guide you through the home-buying process.
Check the Price of Homes that Appeal to You
Sit down with your spouse and make a list of what you want and need from your new home. Search an online real estate database for homes that match your criteria, then use a mortgage calculator to estimate your monthly payments.
Review Your Lease
If you’re currently renting, take a look at your lease and find out when it expires. Determine what the penalties and procedures are for breaking the lease or extending it as needed.
Make An Offer
Once you find a home that you want, it’s time to make an offer. You don’t want to overpay, but a stingy offer can insult the seller and make negotiations difficult. Consult with your real estate agent, who is likely to have an idea about what price the seller is apt to accept, and then make an offer you can afford. Before you submit your offer, discuss with your spouse what you’ll do if the seller rejects or counters it.
Now that you have keys in hand, you’re probably eager to turn your house into a home. Here are a few upgrades to consider tackling sooner than later.
Install A Home Security System
A monitored home security system can make your home three times less likely to be burglarized and save you up to 20% on your homeowners insurance premium. Plus, many systems offer home automation features that can help reduce your utility bills.
Replace the Front Door
Whether your entry door is weak or just downright ugly, replacing it with an attractive steel door is a smart move. A steel door is difficult to penetrate and is energy efficient. Also, if you sell your home, you’ll probably recoup its cost.
Improve the Kitchen
The kitchen is often considered the heart of a home, so it’s only natural to want it to look attractive and feel comfortable. If the cost of a professional renovation is out of reach, DIY projects and tasteful decorating can transform your kitchen in a weekend.
As the two of you search for your home sweet home, remember to establish a budget, make a smart offer and prioritize upgrades. If a security system is part of your home improvement plan, compare multiple systems before settling on one.