Today I would like to share my top 10 first-time homeowner tips as tomorrow is my two year homeowner anniversary.
It’s pretty crazy that it has already been two years since I became a first-time homeowner. I remember when I first bought the house and the mountain of paperwork that came with it.
Life has changed a lot since then but one thing that hasn’t is my love for this house. Since buying the house I’ve quit my six-figure job to blog, bought a new (used) car, and refinanced the house.
Buying a house is a big decision and one you definitely don’t want to rush. If you’ve already made sure you are ready financially congrats!
Here are my 10 best first-time homeowner tips:
Love Your House
When I began house shopping in 2015 my friend (who had owned three houses) told me that when you walk in you will know it’s the house you want. I thought it was total BS but once I walked into my future house I loved it. I loved the size, location, price, and feeling I got when I walked around.
When you are house hunting visualize yourself, significant other and family living there. You want to love your first home as it will without a doubt be the biggest purchase of your life.
As I called it my realtor, “the unicorn” it was exactly what I was looking for and knew instantly I wanted to own it.
Most important first-time homeowner tip: LOVE your house!
Understand The Process
Homeowning is another topic that college seemed to forget to teach. When you first start looking make sure you are in constant contact with your realtor to ensure you don’t make any mistakes when you buy your first house.
Here’s a very brief overview of the timeline of the home buying process:
- Find a house you love
- Get pre-qualified
- Put offer on house
- Offer accepted
- Submit endless paperwork to be pre-approved
- Establish escrow period (think of this as the time until you move in, typically 30-60 days)
- Sign a ton of paperwork, cut the check for your down payment and closing costs
- Ge the keys, pop a bottle of champagne & celebrate
Put Down 20% (If Possible)
If possible, try to put 20% for your down payment. I was able to as my townhouse was under $200,000. This won’t be possible for everyone, especially if you live in higher cost places like SF, NY, or LA.
But the reasons I put down 20% is because it kept the monthly payment low AND avoided property mortgage insurance.
If you’re debating on putting 20% down or being low on cash don’t put the full 20% down. When you first move into a house there are a lot of upfront costs such as moving, home decor, and minor repairs. You don’t want to put down 20% if you are going to be “cash poor.”
You don’t want to put down 20% if you are going to be “cash poor.”
If you are unable to put down 20% as your down payment make sure to track your loan payments until you hit 20%. Once you have paid 20% of your house you can work with your lender to remove the PMI to lower your payment.
Keep Your Mortgage Low
When I bought the house I was a comfortable job, making a good salary and could easily afford the mortgage. But I always wanted to keep a low payment as I had a feeling I would eventually become self-employed and have less stable income (temporarily).
Too many people overextend themselves when they get their first mortgage. If your mortgage payment is high compared to your income it will add undue stress to your life and might regret your decision.
A good rule is not to spend more than 30% of your monthly income on your mortgage payment.
Related Read: The One Number First Time Homeowners Should Focus On
Evaluate The Size
Do you really need 3,000 square feet or four beds/four baths? I opted to buy a townhome that was 2bed/2bath. Even though I was approved for a $300,000 house I chose to go significantly under my approval limit.
This ended up being one of the greatest choices when I became a first-time homeowner. If you don’t plan on this being your “forever home”, plan on moving in the future, or aren’t having kids don’t buy a big house. Look at other options like townhouses or condos, just make sure the Homeowners Association Fees aren’t too high.
By purchasing a smaller house I was able to keep the mortgage low, not have to furnish tons of new rooms and save a ton of money.
Related Read: 5 Reasons to Buy Small On Your 1st Home
Love Your Location
Don’t just like where your house is located, LOVE it! I was able to get a place that is close to everything in Scottsdale. Restaurants, bars, golf courses, freeways, stores, it is all close.
Make sure your house is convenient to an area you like, restaurants, freeways, and your work. Not only will it be convenient it will be crucial for the future when your rent it or sell it.
People buy locations, not houses.
Things will break when you are a homeowner. Make sure you have money saved up for these repairs or emergencies. After two years I’ve had to replace the air conditioner, garage door, and some minor repairs.
Some are cheap, some are expensive like the air conditioner. Don’t spend all your cash on the down payment so you can have extra saved for your house!
I always encourage all my readers to have an emergency fund of 3-6 months living expenses. Once you become a homeowner work on increasing or creating a house emergency fund. For multiple savings accounts that pay 1%, I recommend Ally Bank.
I recommend your first mortgage is a 30 year, fixed price loan as this will give you the lowest monthly mortgage payment.
But make sure to stay in touch with your lender to see if refinancing your house is a good idea depending on the market rates.
When I refinanced I was able to drop 1.25% and 10 years off my loan. I went from a 30 year, 4.625% to a 20 year 3.5%.
The best part? The monthly payment went up $100 dollars and didn’t spend any money out of pocket.
Related Read: How I Saved $60,000 on my Mortgage
Talk With Your Significant Other
When I bought my first house I fully intended on living together as the next step for Ms. Super Millennial and me in our relationship. But I was very poor in communicating that during the process. Thankfully she said yes to being my roommate and has been the best roommate ever 🙂
If you are in the process of wanting to buy a house together make sure to have “the money talk.” Buying a home is a ton of responsibility. Make sure you and your partner discuss the down payment, closing costs, and the ongoing costs once you move in.
This might be the second most important first-time homeowner tip. I don’t think I truly enjoyed being a homeowner until about four months after moving in. After parting ways with a lot of money (down payment), movers, and the joys of unpacking I was slightly overwhelmed.
Once you get settled in make sure to enjoy your first home, you only get to do it once! It’s an incredible accomplishment and one that you should give you a huge amount of pride.
Do you have any other first-time homeowner tips? Is owning a home a goal in your life? Would you do it again if you could?
Let me know in the comments!
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