Buying your first home is nothing to shrug about. There are a lot of important considerations and decisions that must be made in order for this purchase to be practical and financially sound. Whether you are a young professional venturing out on your own, OR a newlywed couple looking to find a new home to start your new life, there are a few key things you will want to consider first. Realtor.com shared a few questions you need to be able to answer before buying your first home and we also think they are key in making a sound decision.

1. Where do you see yourself (or your family) in five years?
   Buying a home is not a temporary deal: unlike renting you cannot walk away from your mortgage after a year with little financial obligation. If you think you may be changing jobs, or you are finishing up a degree or some type of training program that may require you to relocate in the short term, purchasing may not be for you. Getting into a mortgage will be more lucrative for you in the long-term so try to think longevity.
2. How does your credit look?
   It’s important to know about your credit, and potentially your partner’s credit if you plan to co-borrow on a loan. Credit plays a huge role in your mortgage amount, so if you are talking about buying make sure you are managing what debt you have, if any, and work to maintain and improve your credit score.
3. Can we afford all the expenses of homeownership?
   Homeownership is more than making your monthly mortgage payments, you are now responsible for home and yard maintenance, home repairs and improvements, and all bills associated with living in the home, which may have been covered for you in previous rental agreements. All of these things can put a major dent in your reserve funds. It’s also really important not to over-commit by draining your savings or borrowing from family to be able to afford your first home. On the upside, when you get a fixed mortgage it will be consistent, unlike rent which can rise annually.
4. How is the market where you live?
   Its important to be up-to-date on the local market trends. You need to know what houses are selling for in the areas you are interested in vs. what you can afford, and you need to know if the market is stable or if it tends to fluctuate on a regular basis. It’s also key to keep up with home inventory levels, as this can have a huge impact on selling price of homes. The best way to find all of this market information is to contact a real estate agent.
5. What is your exit strategy?
   In an ideal world we all like to think that we will stay in the new home we purchased for many years, at least long enough to keep you from losing money on the deal, but things change. You need to be prepared for a swift exit if you (or your partner) get(s) a new job, loses a job, has a family emergency that requires you to move, etc. It’s important to talk about how you would handle these events up-front so you are prepared to deal with them should they arise. Will you sell first, then buy? Or, can you float multiple mortgage payments for a period of time? Is renting an option if you are unable to sell quickly. All of these are options you need to be willing to weigh in the event that life happens, as it often does.
6. What is our lifestyle?
   Thinking about how you live your day to day life and what you need in your home to do this is key in making a decision. If you travel a lot for work, or work late hours and don’t have time for much home maintenance, you need to consider your lot size, floor plan, etc. Also, if you plan to entertain, or like to have overnight guests, you want to make sure the home can accommodate those things. Your new home should be an extension of your lifestyle. Making sure it has all the right elements is key to staying happy in your new space.

Once all of these points have been discussed you are well on your way to making a sound decision in your first home purchase. You want to make sure you know exactly what you are getting into, financially, as well as personally, and using these exploratory questions will help get you on the right track. After all, you can only buy your first home once, and don’t you want to love it? Check back next Friday to learn about some of the most common mistakes made by first time buyers.

Source: Rent Vs. Buy: Six Questions Newlyweds Need To Ask by Deidre Woollard – Realtor.com