First Time Home Buyer: Overcoming Common Fears
It is very common for a first time home buyer to experience certain fears. These feelings are understandable: buying a home is a big step, and it can be a complicated process. We asked home buyers who purchased a home in the last five years to describe their most significant worries before buying their first home. We also asked them how they overcame these fears, and if they could provide advice and tips for others in a similar position.
Can I really afford this house?
Many first time home buyers worry about overpaying for a house. They ask themselves, what if we can’t afford the mortgage payments after all?
There are several ways to avoid making the mistake of overpaying as a first time home buyer. Peter Van Brady of SoCal VA Homes recommends, “If your new payment is at the ceiling of your affordability range, it’s always a good idea to be anticipating an increase in your income in the near term.” In other words, have a concrete plan to raise your monthly earnings.
Another crucial factor is to be patient when selecting a home. “I wish I would have shopped around for more homes in the area before deciding because I would have saved money,” says Becky Beach, Finance Blogger at Mombeach.com. Sometimes being overly eager to get a house or trying to speed through the home buying process can result in paying more than you can reasonably afford, especially in a competitive market. Give yourself the chance to browse widely and be open-minded, hopefully choosing from among different neighborhoods and housing styles.
Keep in mind that you don’t have to buy at the higher end of what you were pre-approved for. Spending more on a house does not always mean that you’re getting a better house for your family’s needs. Deciding to spend less than you were pre-approved for, even erring on the side of caution, could relieve concerns about affordability in the long run.
“We opted to buy below what we were pre-approved for because we didn’t want to be financially strapped in case of emergencies or someone losing their job. We made sure we bought a home at a price point that gave us some breathing space,” advises Jenny Chang, Account Director at PKPR.
To lessen your fears about the affordability of future payments, we recommend getting an initial estimate of your mortgage using SoCal VA Home’s mortgage calculator.
Will we have enough cash on hand at closing?
A common concern for a first time home buyer is whether they will have enough cash on hand at the time of closing. If this is a big worry for you, have a backup plan to make sure money won’t thin out near closing.
“We spoke with some family members to get a sense of whether or not we’d be able to get any last-minute financial help in the event we came up slightly short. Going into closing, we knew how much cash we had in hand and also what the bandwidth was of our family for help,” explains Jenny Chang.
Make sure to develop a trusting relationship with your agent and your lender – your team. When they are on the same page, and you enter escrow, your team should be able to provide a very accurate estimate of your cash required to close, if any is required at all. For Veterans using their VA loan, often your team can negotiate a “no closing cost purchase.”
Will I be able to afford maintenance on my new home?
A common worry among first time home buyers is whether they will be able to afford repairs if something goes terribly wrong with the house after purchasing it. Having homeowners insurance or getting a warranty on purchases is usually a good idea. Becky Beach did just this since she wanted to avoid paying for expensive home repairs after closing. She says, “To be safe, I paid for the home warranty coverage with American Home-shield with the realtor.”
There are other ways to avoid paying for expensive home repairs shortly after buying your first home. “Know what your limitations are, where you have an advantage and disadvantage and how much “house” you’re able to handle,” advises Jenny Chang. This is where you will want to think carefully about the type of home that is best for you. Purchasing a condo or townhouse could mean being responsible for fewer repairs and upgrades, such as roof repairs and landscaping.
It’s essential to take the home inspection report seriously so that you have the most accurate idea of the home’s condition. Matthias Aleckna, Energy Expert at EnergyRates.ca, writes, “Depending on its features and overall structure, you could face higher or lower monthly costs. Still, there are many things consumers can do to make sure their first home is not going to be a money vampire.” Pay attention to the home’s insulation and types of windows installed. These kinds of features affect how much energy you will have to pay for to regulate the temperature inside of your home in the long run.
A Support System is Key for First Time Home Buyers
A first time home buyer absolutely needs a support system. Clear and supportive communication with your significant other, family members or closest friends is key to keeping stress levels down. Talk to others about their experiences buying a home for the first time and ask how they navigated their own fears and concerns.
“There will be times where you are terrified and times where the other person is terrified. You have to support each other and lean on one another in the process,” suggests Jenny Chang.
Finally, choose to work with a lender and a real estate agent, or broker that you feel comfortable with. Jenny Chang emphasizes how important this was in her experience. She explains, “In our case, our mortgage broker was fantastic. He not only cared about getting the deal done, he was very concerned with how we were feeling every step of the process. He reassured us that we had what we needed. Being able to trust your mortgage broker (and your real estate broker) is critical.”
Contact Us Today!
SoCal VA Homes is a full-service real estate broker and direct lender with unique and powerful VA programs, specializing in helping Veterans use their VA home loan benefits. We are always enthusiastic about helping Veterans who are also first time home buyers!
If you are a first time home buyer, we encourage you to check our listing of homes for sale in Southern California. If you plan to use a VA home loan, we would be thrilled to talk with you about our three breakthrough home loan programs: the Dreamweaver Home Purchase Process, 100% Home Construction Loan for Veterans, and Veteran’s Angel Program. We can help you determine just the right program for your situation and needs. Contact SoCal VA Homes at (949) 268-7742 for more information.