Many first-time property buyers find the process of buying their first home more than a little over-whelming. There are so many important things to consider that they often forget a few important things that are easily overlooked.
Let me explain.
A cute little bungalow has just come on the market. It is a one (or two if you count the little room in the back) bedroom square box with lots of charm. There is only one tiny bathroom and no garage, but the price seems a bit less than what you were wanting to pay.
Is this a good deal?
Let’s look at one example before signing for that new mortgage. Are there plans for your family to grow? Whether you are currently thinking about a new baby being introduced to the cute little house, babies do have a way of making an appearance when you least expect them.
All of a sudden, your cute little one bedroom is no longer the right size and everyone begins to complain, especially the baby in the middle of the night when she is hungry, fussy, or needs a diaper changed. However, I digress as that is a blog for a different day.
If the market is not as good as when you purchased, you may find that you have little to no equity to help you make the move to a larger property. If the market is good, the mortgage rates could be higher and you have to determine whether you are able to afford a substantial increase for the 3 bedroom bi-level in a different part of town. Building on to your little house may be cost prohibitive for a variety of reasons and the little lot may not support an extension.
When you go to sell, not everybody will find a one (or two) bedroom property appealing. In the Cheyenne market, the little bungalow might have one bedroom on the main floor with the little room downstairs in the basement, so this may not be the best setup for a family looking to break into the market.
If you have the equity, the credit score, and the ability to repay, you do have the option of keeping the home to rent out while you move into a larger primary residence.
The point of this little illustration is to give serious thought to what you THINK you may NEED in 4-5 years. Purchase with your future in mind. The difference between a small home that works for today and one that will work for years may not even cost as much as you think it might.
Helping You Buy the Right House the First Time,
Mark Escalera, MRP – Cheyenne Realtor