The Beginner's Guide to Owning your First Home

Ready, set, BUY!

If only it were so easy. You will never be without worry when in the market for purchasing a home. This is a huge investment that deserves an equally huge, well thought out plan of action. Here's a concise beginner's guide to owning your first home to help form a steady path on your house-hunting endeavor.

Know what you can afford
The most important factor in determining your success when buying a new home is knowing what you can afford and staying within those limits. As a general rule of thumb, you can afford a mortgage 3 times your annual income. Your monthly payments on your mortgage should not exceed 28% of your monthly income, while your monthly bills should not exceed 36% of your monthly income.

For example, if you make $36,000 a year, you will be able to afford a home worth $108,000 with your monthly mortgage payment being no more than $840 and your monthly expenses being no more than $1,080.

Have your down payment on hand
Depending on the type of loan you're getting, your down payment can be anywhere from 3% to 20%. Having a larger down payment readily available can reduce the amount you have to pay back on the loan monthly. Some other factors that may lower your monthly mortgage payments are having a lower interest rate or a longer loan length.

Other payments you'll need to have on hand are about 1 to 8% of your purchase price for closing costs and anywhere from $250 to $800 for other miscellaneous fees that may pop up.

Get Pre-approved
Being pre-approved for your mortgage is a must in order for you to know exactly how much you have on hand to spend on your new home. Without a pre-approved loan, you may miss out on homes you're interested in because you cannot act as quickly as possible in closing the deal. If you already got the loan approved, you then have the flexibility to make an offer as a home peaks your interest.

Find the right realtor
Realtors are the most knowledgeable people about property on the market for sale. They're familiar with the neighborhood, traffic trends and the prices homes are going for in the area. Real estate agents already know what homes are on sale and which ones meet your criteria, saving you tons of time and providing vital insights into which home will be the best fit for you. Visit CPC for great advice from Belize real estate agents and homes for sale in Belize.

Know what you want
Its easy to get thrown off track of what you really want and need in a home when you see what all some homes have to offer. To stay on track, you should create a list of all your must-haves in a home before you start looking. Then, split that list into two-- wants & needs. Take those lists with you on your house tours and ensure that the home you choose has all your needs in it so you're not looking back with regret for not buying a home with everything you need. If the home checks off all your needs and includes some wants too within your budget, then you've hit the jackpot!

Do your research
Although you'll have the help of your Realtor, its still important for you to know where you stand in your house-hunting journey. It's important to know your budget, but you also need to do your research on the desired location you wish to live in and have some knowledge of the prices homes are selling for in the area so that you can know if the house you're interested in is a realistic option or not.

Make an offer
After you've decided on the home of your dreams, its now time to make an offer to the sellers. This offer is your proposed price for purchasing the home. Your Realtor will normally craft an agreement with your offer and present it to the sellers for them to sign if they are in agreement. If they are, then you've got a new home. If not, you'll have to create a counter offer or find another home that will be sold for the amount you're offering.

Get a home appraisal and inspection
Once your offer is accepted, you will need to get it appraised to know its true value. Also, you'd need a thorough home inspection in order to identify any problems with the home. Both are crucial in knowing if the home is a good investment or not.

Close the deal
In closing the deal on your new home purchase, you sit down and finalize all the legalities and ownership transfer. You'll also make the down payment now and pay closing costs if necessary. Finally, you'll also be given the keys to your new home!

5 Tips Every First Time Buyer Needs to Know

Buying your first home is a HUGE deal. Its probably the biggest investment you'll ever make so the pressure that comes along with being a first-time home buyer is sure to be monumental. Don't let your emotions get caught up and hinder your good decision-making skills. Follow these 5 tips every first time buyer needs to know, and you're sure to have a clear path in finding the home of your dreams.

1. Get approved
In order to come out of this investment successfully, you need to know the right amount to invest. The only way to find this out is by consulting with your lending institution to find out exactly how much you're approved for. This amount will then be your guide in your house hunt.

2. Budget smart
Just because you've been pre-approved for a certain amount doesn't necessarily mean you'll be able to comfortably afford it.  You need to take things like renovations, new appliances and furniture, bills and incidentals into account as well with your budget. Ensure that the amount you set to spend on purchasing your new home leaves you with enough change in the budget to cover other expenses so you're not stretching yourself too thin.

3. Research location
More times than not, the location of your new address is even more important than the home itself. A home is something you can always customize to meet your personal taste and style; but there's no changing a location. Do your research and make sure the neighborhood of your potential home is right for you in terms of its proximity to stores, activities, work and school; as well as its crime rate and traffic. Once you have the desired location set out, you can then venture freely into finding a home on the market or land where you can break ground on building your own home.

4. Keep your options open
People tend to get stuck into their pattern of thinking and block out amazing opportunities that lie outside what they've ever imagined possible. Don't let this happen to you. Just because you've decided on an existing home in your neighborhood to be yours, doesn't mean its the best possible option out there. Spend a couple weeks exploring other locations where the  homes may be cheaper, sort through foreclosures or maybe even building your own home from the ground up. Take the time to weed through all the options available to you instead of just latching onto one option immediately based solely on your emotions.

5. Save, save, save
When you're in the market for a huge investment like a home, its certainly not the time to make large purchases or any major career changes that can negatively impact your budget. You never know what emergencies may happen while you're in the process of buying your home. As a basic rule of thumb, you should have at least 3 months' mortgage payments set aside in your account in case of any unforeseen emergency that may arise.

Bonus: Don't get hung up on the decor and furniture in homes that you tour. Remember all these things can be changed to your liking. Keep your focus on the space the home provides and the flow, to see if it would suite your needs.

You can get more insight into buying your home from the experienced agents at CPC Real Estate Solutions Ltd.