If you’re a first-time homebuyer, you’ve probably discussed the benefits of buying your own home with your family, coworkers, and friends. Most, if not all, probably encouraged you to do it, especially those with their own homes. Yet, despite this advice, you may still hesitate, wondering if it’s the right move. This feeling is normal. It’s a big decision. You’re putting down roots and committing to paying a mortgage for years.
Here are a few things to consider to make it seem like a less feckless move.
Financing Your Home
You may have heard that buying a house is an investment. This may seem hard to wrap your head around if your idea of an investment is money coming in. Buying a house would feel more like a liability than an asset because you’re shelling out your hard-earned money every month.
However, beyond a sales ploy to disarm your resistance, there is some logic to calling it an investment. Buying a home can build long-term financial security because paying down the mortgage builds up home equity. This is an asset. It adds to your total net worth. You can use it to make financial withdrawals or pass on your wealth to your children.
Before getting a mortgage, understand this financial instrument. When speaking to a mortgage lender, don’t let common mortgage terms go over your head. Become familiar with the definitions of “mortgage insurance,” “loan estimate,” “escrow,” “equity,” “earnest money,” “closing costs,” and “annual percentage rate.” Although you might feel as if you’re listening to a foreign language, once you define these confusing terms, you’ll discover that they are practical. “Amortization,” for instance, simply means that each mortgage payment you make reduces your loan balance.
Choose Your Best Location
If you are tied down to a corporate job, choosing a dream location may not be an option. However, if you have a remote business or are retiring, then choosing your ideal location is something to consider. For instance, if you’ve loved visiting Hawaii on your vacations, enjoying its gorgeous scenery, friendly people, and wonderful weather, then this might be a place to consider. According to a well-established bank in Hawaii, mortgage rates have dropped — so now might be a good time to move to Hawaii.
Deciding on Features
Unless you have a large family or plan on having one, a comfortable house size is somewhere between 1,816 and 3,027 square feet, which is the average size of a middle-class home. It’s not too small, making it hard to find a place to keep all your stuff, and it’s not too big, requiring you to spend hours just keeping the place clean.
If you are into ambiance (the look-and-feel of your home), then house style is important for you. To decide on your style, first think about your ideal color scheme. Do you prefer beach-like colors, such as blues and whites and greens or earth tones, with more of a southwestern touch? Do you prefer cream and beige, neutral colors with black and white contrast, or softer hues with a focus on a single accent color? What about your favorite interior decorating style? Do you lean toward old-world Italian, Etsy chic, architectural, classic casual, vintage, or country nouveau? Finally, what kind of house style makes you feel right at home? Country? French? Tudor? Cottage? Mediterranean? Craftsman? Contemporary? Ranch? Victorian? Colonial? Cape Cod?
Besides bedrooms, bathrooms, and a kitchen and living room, do you also want a laundry room, an attic, basement, cellar, or den? What size of rooms do you want? Do you want energy-saving features, such as whole-house green certification, energy-efficient windows, and Energy Star appliances?
In conclusion, pinpointing all the myriad features of your perfect home is an almost impossible task, but reflecting on many of the things you do want will help you instantly recognize a home that will make you happy.