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4 Questions First Time Buyers Should Ponder Before They Make an Offer

You've been scanning the listings for months, and you've found the perfect first home. Buying your first house is an exciting time, but it can also come with a lot of uncertainty. 


To make sure that you are ready for your next move, ask yourself these four questions before submitting an offer. 


1. Why Am I Buying A Home? 

The reason for purchasing your home is important -- are you looking towards real estate as an investment, or are you just tired of renting? Before you know whether a home is the right one for you, you have to make sure that it fits your ultimate purpose. Along with this question, ask yourself who the home is for. Newly married? You'll want to make sure you account for the space a growing family needs before putting in an offer. 


2. What Can I Afford? 

This is likely one of the first questions you asked yourself before starting a home search, but the answer isn't just in your bank account or paycheck. You'll need to do a full survey of all of your income, expenses, assets, and debts to understand what you can realistically add in terms of home payments. 


However, this question also goes deeper, as in "what can I afford in the eyes of a mortgage lender?" Ultimately your personal financial situation will affect mortgage interest rates and loan terms, so while you may think you can add an additional mortgage expense, it's up to the lender to decide whether your credit report and finances support this ability. 

3. How Much Money Do I Have For Surprise Expenses?

Some of the known costs when it comes to buying a home include the down payment, mortgage costs, and applicable closing costs and fees, which are all available on a mortgage lender's Loan Estimate document, provided when you successfully apply for a loan. However, there are likely to be a host of unexpected additional costs that come with the home buying process, which can quickly add up. You'll want to know what the property taxes are for a home and what estimated insurance costs would be, in addition to being able to cover things like repairs and ongoing maintenance arising after the closing. It's important that you have enough savings -- separate from your retirement and emergency funds -- to adequately cover these costs. 

 4. Did I Cover All My Bases During The Home Search? 

One pitfall that can complicate first-time home purchases is not doing enough due diligence in the home search process. You may think you identified the perfect location for your new home, without realizing that similar homes nearby come with significantly lower taxes while still being in proximity to all of your needs. It's imperative for first-time buyers to make sure they have covered all of their bases -- including working with the right real estate agent -- to make sure they are accurately informed upon purchase.