Secrets Revealed for First Time Home Buyers

First-time home buyers can read article after article about the financial ins and outs of buying a home for the first time. These are important to know, but it’s not just about the mortgage! There are some factors that have nothing to do with your new home mortgage, but new home buyers need to know.

Things to Know, But No One Tells You When You Buy Your First Home

1. As a renter, what you didn’t own, the landlord fixed. No hot water? A maintenance man or a plumber comes to fix the problem. An appliance provided by the landlord is on the fritz, your landlord dispatches a repairman, a maintenance man, or comes himself to fix it.

When you own your home, guess what? You are the landlord.

Make sure there is some money put aside in a savings account, exclusively for home repairs. While YouTube and other websites can likely talk you through most minor repairs, as a busy professional do you have the time to spend on home repairs? If not, keep a sizeable amount of money in reserve for repairs. One nice thing about buying a new construction home is that it usually comes with at least a one-year warranty. If something breaks, your contractor will repair it. If a new appliance stops working, it is under warranty. There are services that charge a few hundred dollars per year and give you a warranty on everything in your home. If you need a repair, there is a small deductible of $50 to $100. If an item cannot be repaired, the service company will replace it. (This is an excellent idea for homes that are resales).

2. If your home is under the authority of a homeowner’s association, read the rules governing the association.

For example, you buy a home in a homeowner’s association in a place you really love and want to retire to. But your job has you moving all over the country, so you’re going to rent it when you leave the area. The problem is, you can’t – as it is against the homeowner’s association rules to rent your property. Or, maybe you always fancied a blue home with a gray trim, you cannot paint your home those colors as is not the colors allowed on the approved exterior home color list. These are not the rules of an association gone amuck – they help protect the community from things that can lower property values. Even the rental rule makes sense, as renters sometimes do not keep the home and yard to the same high standards owners do.

3. If buying a previously owned home, make sure that you have the home inspected by a certified home inspector.

These folks can tell you about things that need repair (or a buyer’s credit) that may not be obvious. Some homeowners cover up defects cosmetically. Water damage is one of the most common defects hidden with paint. Your home inspector finds the source of the damage and determines if it is fixed or not.

4. Buying a home in the suburbs is great when you are raising kids.

But as young professionals, are you comfortable giving up easy access to the culture, fine dining and nightlife? Make sure you have an easy drive to the places you love.

5. Some cities have easy public transportation to the suburbs, such as New York, Los Angeles, and San Francisco; others not so much.

Check the area for public transportation. If you enjoy some drinks with friends when you socialize, realize that one of you has to be the designated driver if public transportation (including cabs) is difficult.

6. When choosing a first home, repress the risk of buying in “the next great city neighborhood.”

Gentrification of an area is risky, so rather than buying a home in a neighborhood about to “turn,” buy something smaller in a better neighborhood.

7. If you are planning on having kids, factor that into your decision-making.

While you may consider a first home just for yourselves, housing markets do change, and a move may have to be postponed. If kids could ever be in your future, make sure to consider school districts, nearby parks and playgrounds, and kids’ activities too.

To many, home ownership is part of reaching the “American Dream.” It is true that homeowners usually find ownership boosts their finances by allowing them to itemize deductions and deduct mortgage interest. Monthly mortgage payments are like forced savings too.

New buyers sometimes focus too much on the financial aspects of home ownership without realizing the more touchy-feely advantages of owning a home, such as where you raise your children. Pride of ownership is another powerful emotion that comes with owning a home. Owning a home also gives us a sense of community, a place to sink roots and make new friends. When you own a home, you gain the feeling of stability – a place to return to each night and reward you with great memories.