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First-time home buyers should consider all the options
09-08-2011
First-time home buyers should consider all the options
September 1, 2011
First-time home buyers may not want to look to hard for their dream home and
consider all the options, according to MSN Real Estate. Buying a slightly older
home can reduce the cost and be a gentler introduction into the responsibilities
of homeownership.
This can allow the home buyer-turned-homeowner to build equity over time, putting
him or her in a stable position from which to buy the home they intend to stay in
for the long-term. It's also possible home buyers' circumstances will change in
the years after making a first purchase, and having more flexibility may be
helpful.
Factors affecting budgets
First-time homebuyers may be unfamiliar with the maintenance needs of a home. MSN Real Estate recommends budgeting 1 to 3 percent of the home's value for future
repairs. Factors like inflation and the increased use of 401(k) and similar
retirement plans has changed the financial outlook for individuals and families.
For example, many couples used to have only one full-time worker, which meant
that if finances became strained the second could get a job to meet their
changing needs. Now, most adults are working already.
A less expensive home or a condominium may help keep the mortgage manageable
while building equity and gaining experience as a homeowner. Shorter mortgages
may also decrease the total interest paid over time and pay down principal
faster, decreasing the long-term financial effects. Additionally, a cheaper home
will likely have a more affordable down payment than a dream home.
Advantages of patience
Starting small gives new homeowners a chance to learn what they need to know in a
more tightly controlled situation, with more financial leeway to cover any
unpredicted expenses. This may include expenses not directly related to owning a
home.
MSN Real Estate points out first-time homebuyers are frequently at a stage of
life where they may change jobs or have children, which can affect life in a
variety of ways. If one member of a couple changes employment, for example, they
may be paid more at their new job but be unable to use public transportation,
requiring the lease or purchase of a car.
Waiting may also allow time for other debts to be paid off, improving the buyer's
available finances and lenders' perception of the homebuyer to secure a better
loan.
About Coldwell Banker®
Since 1906, the Coldwell Banker® organization has been a premier provider of full-service residential and commercial real estate. Coldwell Banker is the oldest national real estate brand in the United States and today has a network of approximately 83,000 sales agents working in approximately 3,100 offices in 50 countries and territories. The Coldwell Banker brand is known for creating innovative consumer services as recently seen by being the first national real estate brand to create an iPad application and the first to fully harness the power of video in real estate listings, news and information through its Coldwell Banker On LocationSM YouTube channel. The Coldwell Banker system is a leader in specialty markets such as resort, new homes and luxury properties through its Coldwell Banker Previews International® marketing program. Coldwell Banker Real Estate LLC fully supports the principles of the Fair Housing Act and the Equal Opportunity Act. Each office is independently owned and operated.
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