When you’re buying your first home, there are a lot of variables to consider. What if you can’t afford it? What if you’re paying too much? What if another, better deal comes along? What if prices go down after I buy? What if I’m not up to working on this home? These are all valid concerns, and don’t necessarily have easy answers. We can help you get over your cold feet buying your first home by hopefully giving you some
‘What if I can’t afford the house?’
The best rule of thumb is that your housing costs shouldn’t total more than 28% of your gross income. If you’re spending more, you didn’t necessarily buy too much house. Every situation is different, that’s why it’s a rule of thumb rather than a law.
Work within your budget. You should buy the home you can afford, while still leaving room in your budget for life changes. Can you still make payments if you lose your job? Do you have savings for an emergency? That’s what you need to make sure of.
‘Did I spend too much?’
Were you fighting off multiple other buyers? Then you’re justified spending a little more to get your home. The best way to find out if you overpaid, or if you’re about to, is to talk to your realtor and check comparable homes in the area. The appraisal should also put your mind at ease. If it comes in far lower than your offer, you may not be able to get the loan, or you can re-offer at a lower price.
‘What if I find a house I like more?’
Second-guessing is a game you never win. You can’t look back once you’ve bought and wonder “what if?” If you didn’t do your due diligence and see multiple homes, you may see one you think you like better later, but remember, you bought your home after months of applications, credit checks and saving. This is your home. Make sure that you’re happy before you buy, and you’ll be happy afterwards.
‘What if prices go down after after I buy?’
After 2008, this is a concern that many people have, and it’s justified. Right now though, it’s a very empty threat. Housing inventory is really low, and with the really low interest rates today, everyone is looking to refinance, raising home values across the board.
Just remember this rule. If you plan to live in a house more than 5 years, you generally will make money on your home.
‘What if I underestimated how much work this house needs?’
Many, many people get into the home flipping business. They are not all suited to the work. Rebuilding the house is a ton of work, and not everyone is up to the task, frankly. Use the inspection report to find out what you’ll have to work on when you move in, and have a plan on what you need to get done first. It can be overwhelming to have 100 projects at once, so start with the necessary work and move on from there.
Hopefully this will help you make your decision to buy a home. When you’re ready give The Home Loan Expert team a call. Take advantage of lower mortgage rates to buy a new home and save money. Call us in St. Louis at (314) 781-9700, Chicago at (773) 770-6438, Indianapolis at (317) 550-1515. or Nashville at (615) 810-8555. You can always apply online at www.thehomeloanexpert.com, and we’re also open on Saturdays to better serve you. Don’t forget to follow @TheHomeLoanEx on Twitter for breaking mortgage news and knowledge. Nobody gets lower rates on better loans than The Home Loan Expert, Ryan Kelley, why go anywhere else?