Buying your first home is like a sour patch candy commercial, it is sour at first, but then it is sweet. There is no better feeling than walking through the doors of a home that you own after a long day of work. You realize that all of your hard work has given you the ability to purchase and design something that is yours. My mortgage is significantly less than the rent my wife and I were paying while living in our beautiful northern liberties loft. One of the things that made us want to buy was the cost of our rent vs. the cost of a mortgage. Once we had enough saved for a down payment, buying made the most sense. While looking for a property to call home, you do not have to settle on items that aren’t on your must-have list. For example, two of our must-haves were parking and a bi-level condo layout. During our search, we were able to knock off homes that our realtor wanted to show us that didn’t include our must-haves.
Over the years, I have learned that owning real estate is a great way to build long term wealth in the form of equity. Home equity is the difference between the home’s fair market value and the outstanding balance of all liens on the property. For example, if you purchase a home for $100,00, it appraises for $125,000 two years later, and the balance on your mortgage is $76,000; you have $49,000 equity after two years. Listed below is a quick list of the buying process.
- Obtain a pre-approval letter from a mortgage lender
- Set your max home budget and list your “must-haves”
- Select a realtor: McKinsey Alston
- Have homes that meet your criteria sent to you daily
- Tour homes
- Put in an offer & negotiate the price
- Order title
- Conduct inspection
- Order appraisal (Lender handles this)
- Negotiate again
- Build wealth in the form of home equity