So, maybe you’ve just landed your dream job and want to settle down in Asheville. Or, you’ve been a long-time renter and want to have a place you can call your own one day. Whatever your circumstances, buying your first home can be an intimidating process. To help you out, we’ve put together a handy series of blog posts that walk you through the entire process, from daydreaming to your first housewarming party.
In this first post, we’ll go over those crucial early steps that you’ll want to start thinking about before you even make a call to one of our realtors.
Understand Your Priorities
There are homes tailormade for everyone. For some of us, deciding what we want is harder than actually finding it once we know. To help figure out what your taste is, you can start by making dream boards and priority lists. Think about what you love about other people’s homes, maybe watch some renovation shows and draw inspiration from what you see there.
You don’t need to know an exact figure on square footage and the color of every room, but you should start to form an idea of what you’d like to have. Try to arrange things from “must-haves,” like a number of bedrooms and bathrooms, to non-necessities like vaulted ceilings or hardwood floors. These priority lists will be different for everyone, and don’t let anyone discourage you from putting a “silly” item on your must-have list. This is one of the biggest purchases of your life, make sure you get what you want.
Here are some questions to get you started:
- Do you want to live near the city, or in the country?
- How big of a yard do you want?
- Is architecture style (modern, farmhouse, Tudor, etc.) important?
- How big is your family? Are you planning any additions to your family?
- Do you want a finished home or a fixer upper?
Understand your Finances
Now that we’ve finished your fun project, now it’s time for some homework. If you haven’t already, take a hard look at your finances. Add up your monthly bills, debts, expenses, and income and savings. You want to get a firm grasp of just how much you’re making, how much you’re saving, and how much you owe.
Now is also the time to check your credit score. You want to do this early so you’ll know if you have a bad score or any red flags that could impact your mortgage rate. Credit is something you can work on and improve, and most credit checking apps include options that will let you see the impact reducing your debt or number of late payments will have on your score.
Once you have a perspective on what your financial situation looks like, you will be able to make realistic assessments of what you can afford, and when you’ll be able to afford it. Most experts suggest your home price shouldn’t exceed three to five times your annual household income.
And one more important thing: don’t let your financial situation discourage you from looking at homes! If you’re dealing with student loans and not making the salary you’d like, you might not be buying a multi-million-dollar luxury estate. That isn’t the only kind of home out there, though.
Make a Timeline
Are you ready to move when your lease is up in six months, or do you need some time to get your finances in order? Either way, you’ll want to have at least a rough idea of when you want your move-in date to be. You don’t need to have a firm date circled in ink on the calendar, and probably shouldn’t—these things take time and there are almost always unexpected hurdles and delays of some kind. That being said, knowing when you would like to be in a new home will help you put your financial priorities in perspective and make this feel like a real goal and not a “maybe some day” thought.
The typical down payment on a home is 10%-20% of the final sale price. That can be a lot of cash to have on hand, especially if you’re in the early stages of your career and haven’t been saving for long—or at all.
Don’t let that discourage you, though. Since you’ve already calculated your expenses, you can start figuring out how much you can put away. Maybe you have money left over at the end of each month that you’re spending on things you don’t need. If that’s the case, good news! You can start putting that money away in a savings account. If your finances are a little tighter, it’s smart to look at things that you can cut from your budget. Small things like making coffee at home, packing your lunch, or cutting a streaming service you don’t use that often can add up to big savings each year.
Your savings plan might put a longer timeframe on homeownership than you’d like but remember: life isn’t a race. It’s smarter to bump your one-year goal out to a two- or three-year goal than to take on a serious debt burden that will weigh you down for the next thirty-plus years.
Relax. You Can Do It!
Buying a home in Asheville is a big move, but it is worth it in the long run. You’ll have the security and freedom of ownership, as well as a sound investment for your future. Now that you’re setting financial goals for yourself, it’s time to start thinking about getting pre-approved for loans and finding a realtor. We’ll help you with that in our next blog post. Until then, feel free to familiarize yourself with our realtor team and the many great neighborhoods in the Asheville area!
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Our agents receive extensive training and are equipped with the latest technology to help you find your next home. Most importantly, they love working with people just like you!