What Is a Good Price for a First-Time Home Buyer?
Finding That Perfect Price For A First-Time Homeowner
There is something that we must all consider and that is known as payment shock, which is basically a large increase in monthly liabilities.
An example of this would be if your housing payment went up 200%, that would be a shocking experience! Imagine paying $1,000 per month for a rental only to have to pay $3,000 per month the next.
You more than likely are beginning to understand what type of situation you are getting into.
It is always going to be better to stay under budget as it is going to take time to deal with the larger costs of owning a home.
This is true once you begin to see all of the other bills associated with owning a home such as that much larger electric bill.
Many times when looking at a home, we tend to over exceed our budgets, which means you have to have a budget ready to go.
Starter Or Forever Home?
Most home buyers usually look for a starter home to begin with.
Typically with time, they will move up to a larger home.
However, one must understand that there are many transaction costs involved in the purchase of a home.
You may consider that buying your forever home right from the get go is a more sensible solution.
Taking the budget out of the equation, it is still not that simple of a process. Home purchases are not only an expensive transaction they are highly time-consuming.
While the cost to close a home is rather expensive, you can expect the process to be rather lengthy.
In addition, it can be just as expensive to sell a home, one must consider repair costs, closing costs, real estate costs, and other associated fees.
In the simplest terms, buying and selling a home is an expensive process, so limiting the experience may be a good one.
If you have the funds, you may just want to look for a forever home and bypass the whole starter home process.
Many millennials have started with this trend and feel as though it is working out for them.
However, statistics have shown that few people stay in the same location for extended periods of time. For many people, they tend to stay in one home for ten years or less.
This just may ruin the fixed mortgage vs. ARM, however, that is a discussion for another day!
You will just have to weight the proc and cons of a starter home vs. forever home to decide what is best for you.
A starter home is going to be your cheaper option in the beginning, however, a forever home may be the cheaper alternative in the long run.
One must simply take the time to decide what is going to work the best for their finances and options at the time being.
In many cases, starting with a starter home is the only way people are able to save up and generate a down payment for their larger home in the future.
However, what do you do if you want to bypass all that and simply buy one home? It helps you avoid a lot of excess costs and headaches.
Plus it gives you a home that you can grow into as a family. In addition, you are not going to find the same level of competition with a forever home as you would with a starter home, so no bidding wars to contend with.
It seems as though that is the best way to go, doesn’t it?
However, this is one of those cases, where it is easier said than done. In all reality, you more than likely will get tired of that home and end up moving down the line.
You are going to find that it can be hard to find a home that is going to match all the various stages of your life at one time.
The Price Depends On Your Needs
There is not one price that is going to fit everyone for their first home.
It is going to vary depending upn your needs and affordability.
However, it is always wise to look into your future before you make that initial purchase.
Be sure you try to negotiate on the price of the home when you find the right one.
Keep in mind, depending upon your needs and wants is going to have an impact on what you pay.
For every location and number of bedrooms and bathrooms that are required will impact your bottom line.
There are going to be times where your price point and what you need and want are not going to add up and you are going to have to find a way to make things right so you can afford something.
If you do have the extra savings and some wiggle room, you very well may be able to afford your forever home today as opposed to ten years from today.
However, you will still be limited by the amount of homes that are in the market.
Price is always going to be determined by square footage, number of bedrooms, desirability, and of course the location.
Every individual is going to have various needs and find out what they are able to afford is quite different.
Basically, there is not one right number to this equation. It is simply a matter of what you can afford and what is available. As well as how many times you are willing to go through this process.
Before making a decision, let one of the experts at The Texas Mortgage Pros help you find out exactly what loan is best for you. Contact us today Or Call Us @ (866) 772-3802 click here to go to the first article in this series.