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Getting Your Financial House in Order
You might already be daydreaming about decorating your new digs, but if your finances aren’t on point, that dream may well remain just that–a dream.
So the first step in landing your starter home is to work on building a strong credit history. After all, no matter how modest your first home might be, it’s still almost certainly the largest purchase you’ve ever made, and it will be the largest unless or until you upgrade to your next home.
But if you have bad credit, or no credit at all, that can be a significant deterrent and you’re going to need to work both hard and smart to qualify for a mortgage loan. Consulting with a financial planner can help speed that process along, especially if you’re trying to establish a positive credit history for the first time.
Younger buyers, in particular, might not have challenges just in establishing a credit history, but they might simply be reluctant to take on such debt. After all, millennials might have better jobs and wages than young adults in previous generations, but many are also saddled with significant student loan debt and an increasingly volatile global economy.
Nevertheless, homeownership continues to be the most significant source of wealth in the United States. And if your situation allows, it can provide substantial financial security, not to mention the personal satisfaction of having a place to call your own.
Nothing Like the First
Once you’ve decided to take the leap and you’ve landed your mortgage loan or pre-approval, it’s time to start the search in earnest. But there are some important things to look for when you’re trying to find the starter home that’s right for you.
1. Location Really Does Matter
They say that when it comes to real estate, only three things matter: location, location, location. But it’s really true, especially when you’re buying your first home. The neighborhood you choose isn’t just going to impact your quality of life while you’re living there, it’s also going to strongly determine the property’s value–including its future resale value. After all, a starter home isn’t meant to be forever.
2. Maintenance Matters, Too
It doesn’t matter how much you might love the looks of the home, if it’s not been properly maintained, you’re just borrowing trouble. So take care to look for signs that might not be so obvious if you’re distracted by that gorgeous antique fireplace or gigantic soaker tub.
Look for signs of leaking or dampness, such as water stains on the ceilings and wall because these can signal the presence of potentially dangerous mold growing in the unseen spaces of the home.
Notice how easily doors and windows open and close because windows and doors that stick or won’t close properly may signal that the home is settling, putting walls, roof, and foundation at risk. Check the gutters for signs of regular cleaning, neglected gutters can lead to damage to the roof and the foundation.
3. Don’t Judge a Book By Its Cover
It’s important to pay attention to the big issues, the things you can’t change, like location, or the problems that could cost major bank, like a faulty foundation. But make sure you don’t let an easy cosmetic fix cause you to miss a hidden gem.
For instance, a bad paint job can turn a beautiful room into a fright. So take care to look beyond the garish colors and heartbreaking hues to the bones beneath. Once the house is yours, you can transform the space with a good scrubbing and fresh coat of your favorite color.
And while you’re at it, pay attention to how you might turn the space into an energy-saving, equity-building dream. Simply switching out incandescent light bulbs for LEDs or letting natural light in whenever possible can help you slash energy costs, giving you more cash to spend on turning your new house into the perfect home!
Buying a starter home can be one of the most memorable and exciting times of your life. But it can also be stressful, confusing, and overwhelming if you don’t know what to look for. Fortunately, having a strategy in place before you start the house hunt can make the entire process easier, more successful, and more fun! It starts with getting your money in place and then setting off to find that space with the perfect location, great bones, and just the right character–the house that’s just waiting for you to make it a home.