List of Challenges and Tips
If you are new home buyers and you are on that fence, it makes a lot of sense. Sometimes you get a lot of anxiety and concerns. Yes, it could be less confusing and easy if you know how to go about it. Today we will discuss the most common challenges faced by new home buyers and also understand how to get over these challenges.
1- Commitment Issues for New Home buyers
When you are thinking of buying a home, especially the new home buyers, there is a lot of anxiety and fear, which could be called the fear of the unknown. The best way to replace fear is with knowledge. Because with knowledge comes power, and with power comes the comfort and confidence to make a well-informed decision.
The reason why this is one of the biggest things across the country for the new home buyers as commitment issues is that a lot of home buyers feel nervous of making sense about 15 years or 30 years fixed-rate mortgage or ARM.
2- Demystifying Mortgages
There are four primary types of loans out there. VA, FHA, Conventional, and USDA. Sometimes you must know different kinds of loans just to make sure what options you have and which one would benefit you the most. It is a common understanding that if you want a conventional loan, you have to come up with a 20% down payment
Well, that is not the case; there are conventional loans that have as low as 5% down payment. When we talk about demystifying mortgage, it is about having a robust conversation with your trusted loan officer, which will bear great fruit for you.
Though there are four major categories of loans, there are many programs under these categories for you to choose from.
3- Jumping The Gun
Jumping the gun can also be just getting overly excited. Maybe you are looking for a house online, and you get excited and call the first realtor that you know. You call the realtor and decide to go take a look at it, and you liked it.
Next thing you know, you are eager to make an offer. But the important thing that you are missing here is to be prepared. You need to prepare your self for buying. Having a plan before you start house shopping would always help.
Things you can plan are like would you be qualified for the specific loan amount, how does your credit look, how does your income look like, etc.
4- Being House Broke
Being house broke means you have overcommitted. You want to make sure that you are buying within your budget. That your mortgage payments do not exceed a certain amount of your debt to income ratio.
That you can still consider living your lifestyle. It is not necessary to buy a home for the amount that you pre-qualify for. Look at your budget, see what you can afford on your monthly mortgage payments which still allows you to live the lifestyle that you are used to living.
Ultimately, it is about you making the right decision which is best for you, that fits into your lifestyle and into your budget.
5- Playing the "What If Game"
The what-if game is a tricky one. You don’t have control of what can or cannot happen in your life. It means all the what-if possibilities like, what if you have to move across the country with your parents or what if you need to move to a different state to take new job opportunity.
Basically, what if, you are not able to continue staying in the house you are planning to buy. In such cases, we would suggest that you search for homes in the area which has high rent capability, the house is suitable to rent to other people.
You might also want to check the value of the house if you decide to sell it with a profit. You can speak to your trusted real estate advisor to check on this.
If you are not getting any benefit, you might want to go with the option of renting. A thing to know is real estate is an investment with long-time hold.
You might want to wait for at least five years to gain some appreciation and make some money and move forward.
It is essential to understand that if you make the new purchase with the right knowledge and the right people who help you to understand the process it will help you significantly. The key to overcoming the challenges a new home buyer faces is by getting the right knowledge, planning your purchase, avoiding over-commitment and to