For years you have been dreaming about buying your first home in Richmond Virginia - and now you are trying to decide if now is the right time to buy that first home! So here are some things to consider as you debate that decision!
When is your lease up? Most first time homebuyers want to make sure that they time their closing with their lease expiration so that they are not having to make double payments (a rent & a mortgage). Knowing when your lease is up lets you know when to start looking, when to write the offer up and, more importantly, when to have your closing on your new home!
How long do you plan to be in the house? The market is very hot right now, and that means that you are probably going to have to pay top dollar for the house you will be purchasing. But if the market cools down, you may need to stay in the house until the market picks back up! So make sure you know how long you plan to stay in your new home!
Are you comfortable adding a mortgage payment to your current monthly debts? If you have a lot of debts (student loans, credit cards, car payments), you will now have a mortgage payment. If the total amount of your monthly payments (including the mortgage payments) are too much, or are more than you are comfortable paying, you should consider paying off some debts before you buy your first home!
Can you afford a fixed rate mortgage? Adjustable rate mortgages may initially begin at a lower interest rate (and, therefore, a lower payment). However, over the long run, the interest rate on your loan may end up surpassing the going rate for a fixed rate mortgage!
Can you maintain your home? If you are currently renting a home, or you are living with parents, repairs can usually be someone else's responsibility! But when you own your own home, those repairs become your responsibility! Make sure you are okay with that and that you are comfortable setting aside some money to cover any big repairs that may come along (new HVAC, new roof, new water heater, any upgrades).
Do you have a stable relationship with anyone that you will be purchasing your home with? If you are buying with a spouse or a partner, or family members, make sure that you have a stable relationship with them!
Do you want to start building equity? When you pay rent each month, your rental payment goes to your landlord, who then pays his mortgage and builds his own equity - you don't get that benefit! But when you buy a home, you are building equity in the house - not only from the amount you pay towards principal each month, but from any appreciation your home may get as a result of the area or neighborhood appreciating and/or any upgrades you have done to the house!
Have you saved enough for your down payment? It isn't necessary for you to save up a 20% down payment - there are a lot of programs out there that will let you get in with a 3% or 3 1/2% down payment, or a 5% down payment. But most of these will have mortgage insurance you will pay each month to the lender! And there are even down payment grant programs to help with your down payment!
Are you ready to make a commitment? Buying a home is a long term commitment! It is not something that you can decide to just move away if you are unhappy with your home or neighborhood! Buying your first home is exciting, but it is also the largest purchase you will make! Make sure you are ready to make that long term commitment!
If you are thinking of buying your first home, contact me - I have worked with many hundreds of first time homebuyers over the years, and understand the questions and concerns you may have as you debate the pros and cons of buying that first home! I would be happy to help!