It’s finally time. You’ve made the big decision: to buy your first home. While the satisfaction of placing a “sold” sign on the lawn listing is immense, it’s not always a cakewalk in getting there. There are financial hurdles to plan for, logistical problems to consider, and of course the tricky process of selecting what you want from a cornucopia of options.
Many customers come to StorageMart having recently gone through the home buying process and are utilizing our self storage solutions to help them through. Here are some important tips we’ve collected for future first-time homeowners.
It’s not necessarily fun, but nailing down your financial requirements for your first home is perhaps the most important step in the process. Your realtor will be of immense help here (and at every other step in the process), but you should still know some basics.
How Much House Can I Afford?
There are two factors in the affordability of a property. First is the down payment, or the amount of money you need upfront to purchase the property. The percentage you need for a down payment varies, but you should try to have a down payment of 20% of the sale price. For a $200,000 home, for instance, the down payment would be $40,000. It’s not required to put down a full 20%, but a lesser percentage will require an additional monthly cost of private mortgage insurance (or PMI).
The second factor in property affordability is your monthly mortgage payment. The full number consists of the mortgage payment itself—called the principal, or the amount that goes toward what you owe—and the interest on the loan and taxes and fees. Property type and where you live are big factors in determining what you owe in taxes and fees.
Overall, the industry standard for loan approval follows what’s known as the 28/36 rule, and it’s a good standard for your own budget, too. The rule states that your monthly mortgage costs should not exceed 28% of your gross household income, and that your total debts—which includes car payments, student loans, and credit card debt—shouldn’t exceed 36% of your monthly gross income. So if your household makes $5,000 gross per month, you should aim for a monthly mortgage payment of $1400 or less.
It’s true that you may have to spend a greater percentage of your income on housing depending on where you live, such as in New York City, San Francisco, Seattle, Boston, and the like. However, keeping within budget as much as possible will help during the long run.
Choosing Your Dream Property
Once you’ve found your budget, it’s time to find your new home! Picking your first home from the many options on the market can quickly overwhelm you, but choosing between each of these three options makes your eventual choice much easier.
Should I Purchase a House or a Condo?
One decision you’ll need to make is what type of property you want to buy. Of course, that’s easier said than done!
On one end of the spectrum, you’ve got a house. Houses are detached one-family units that tend to be what people think of when they think of their first home. Houses usually have yards, and most have at least one garage unit. The interior and exterior of houses are yours, and you are therefore responsible for upkeep and repair. You may also be required to join a homeowner’s association.
On the other end of the spectrum, you’ve got a condo. A condo is a single unit in a multi-unit complex. Condos can either be attached units—basically, apartments in a building—or detached, such as a townhome. When you purchase a condo, you’re responsible for your unit. Shared spaces are called “common spaces” and fall under the purview of the condo association.
Just How Important Is Location?
Location, location, location. You’ve heard the saying, and there’s no real substitute for location. While you can renovate your home to your heart’s desire, you can’t pick it up and move it to exactly where you want. Ask yourself some questions:
● Do I need my home to be in a certain school district?
● How far am I willing to drive for work?
● Is it worth saving money to have a less-than-optimal location?
● Exactly how much more am I willing to pay to get where I want to be?
To Get a Fixer-Upper or Not: That is the Question
Homes don’t all come in the same condition. Some are move-in ready with new appliances and a fresh coat of paint. Others are not and are the type of home that needs the work you’d see on HGTV. These fixer-upper homes offer a lot of potential for you to mold into exactly the type of home you want, and they are almost always cheaper than move-in ready homes. However, they’re obviously not cut out for everyone.
Ultimately, whether you want a fixer-upper or a move-in ready house is up to you. It’s just another question you’ll have to answer before you move in.
Moving Into Your Home
As a first-time homeowner, you’ll avoid some of the difficult logistics that can arise when trying to buy and sell a home simultaneously. Without a home to sell of your own, you can concentrate on closing the deal and getting your items moved from your current place to your new one.
Of course, that’s easier said than done. A study of 2,000 adults who’ve moved during the last few years found that moving was a more stressful event than either a breakup or starting a new job. There’s a lot to do when you’re moving, even beyond the straightforward transportation of getting your items into your new place.
Thankfully, StorageMart is well-positioned to be your partner in this stressful time. Our storage units make relocating easier by providing a staging area for your items, as well as additional storage for your new place. Our storage facilities have amenities that help first-time homebuyers, such as:
● No long-term commitments. Need a unit for a few months? No worries!
● Climate control. For those temperature sensitive items, climate control is the solution.
● On-site moving supplies. We’re a one-stop shop for what you need.
● Drive-up access. With easy access to your unit, moving in and moving out are simple.
● And more!
StorageMart Can Be Your Moving Partner
Finally signing on the dotted line and getting the keys to your first home is an unbeatable feeling. The road getting there and the road afterward can be stressful. Before you pick out your home, make sure it fits your financial budget, fits your location parameters, and is the type of home you want to invest in.
Once you’re ready to move in, your friends at StorageMart are ready to help. Ready to take that step? Contact your closest StorageMart location and reserve your storage unit today!