Maryland first time home buyer

Seven New Rules for Maryland First Time Home Buyer

The Real Estate market has changed and so must Maryland first time home buyers!

Congratulations, you have decided to become a Maryland first time home buyer! It is both an exciting and busy time and there is a lot to consider. Before you start hitting the online searches looking for your first Maryland home, take a look at these seven new rules for home buyers.

1. Get Back to the Basics

Years ago it was standard practice that people would wait until they had a 20% down payment before they could purchase a house. This gave Maryland first time home buyers instant equity in their house, which meant even if the market went down a little they would still be coming out ahead.

However, as lenders wanted to write more loans they lowered their standards to the 0% down payment, approved people for more than they should have, and the housing crash happened.

While some of the practices have changed since then to make it more difficult for people to obtain a mortgage, there are many ways to purchase a house still without a large down payment. It can be enticing, but when you are buying your first home in MD the bigger the down payment the better. Erring on the side of caution is always going to be smarter when it comes to your finances than getting in over your head.

If you want to remain conservative as you purchase your first house consider keeping your monthly payment, including taxes and insurance, to just 35% of your monthly pre-tax income. If you are comfortable spending a little more it is still advised that you do not go over the 45% mark.

2. Take Your Income into Considerationmoving to annapolis md

Before purchasing your new Maryland home consider your income. This doesn’t just mean think about how much you make at the moment, but think about what the future holds as far as you can predict.

Are you just starting out in a career after college? Then it’s a safe bet that your income will continue to grow in the future years. But, if you are closing in on retirement, you want to take into consideration how your payment is going to affect you in the ten years.

While it is important to purchase something that you are comfortable with buying in your current situation, you also want to consider what your finances will do in the future. If you are in a job you hate and want to make a move, it might not be the best decision to rush into purchasing a house before you know how it will impact your income.

3. Keep the Future in Mind

Along with your future finances, you should keep other future plans in mind. If you are engaged or newly married and looking to purchase your first home as husband and wife, will there be the pitter patter of little feet in the near future? You may have your eye on that historical looking row house in Baltimore, but once there are a few little ones running around you might want more space and a big backyard for them to play in. Is there the possibility that when you bring a baby home that one parent is going to be quitting to stay home with the baby? You need to budget for your income to decrease. If baby will go to daycare, your expenses will increase.

You may have your eye on that historical looking row house in Baltimore, but once there are a few little ones running around you might want more space and a big backyard for them to play in. Is there the possibility that when you bring a baby home that one parent is going to be quitting to stay home with the baby? You need to budget for your income to decrease. If baby will go to daycare, your expenses will increase.

Adding a baby to the family isn’t the only future plan to keep in mind. What about becoming an empty nester? A possible career change in the future? A desire for more space, or maybe less? Buying your first Maryland home is a big commitment and you should consider what your needs may be in 5-10 years from now.

4. Budget for ExpensesMaryland First Time Home Buyer

Going from renting to being a Maryland first time home buyer can be a big jump and the expenses add up quickly. To make sure you enjoy the experience as much as possible and the results that you get from it, you need to budget for expenses properly. Talk to your real estate agent and lender to get an idea on how much purchasing a house is really going to cost you.  There are some common expenses that first time home buyers in Maryland forget about such as a down payment, closing cost, and insurance.

As a renter, your rent may have included things like cable, trash bill, landscaping, and more. When you purchase a house, it all becomes your responsibility. That big yard means you will need a lawn mower. Owning a beautiful waterfront property means you very well might need to budget for flood insurance. Take all your potential expenses into consideration when choosing home so you purchase a home you can not just afford to buy but also to maintain.

5. Balance your Wants and Your Needslicensed real estate agents in maryland

When you first start your home search, you will probably be looking for that perfect home.  A large yard, a large house, in a great school system with an easy commute to work and in your price range.  What you will quickly realize is that finding this perfect home may be harder than you thought.

This is why it is important to distinguish between your wants and your needs.  You may even want to priorities which want and needs are the most important.  For example, if you want your kids in a that may mean you need to live in a country further away from your job, giving you a longer commute.  Maybe you wanted a large yard and a two car garage but all the homes available in your ideal school zone have one or the other but not both.  Clearly identifying what characteristics of your home are the highest priority to you will make the filtering processing allot easier when buying your first home Maryland.

6. Purchase a House You Can Stay In

There may be times to start smaller and work up to the big dream, but there are also situations when you can purchase a house that can become what you need it to over the years. The transaction costs and stress of buying and selling houses can really add up. As a Maryland first time home buyer It can be a wiser decision to look for a house that you can remodel or add on to as your budget allows to turn it into the house of your dreams. Don’t be afraid to think outside of the box if it will work for you now and in the future.

7. Trust Your Gut

At the end of the day, you need to be comfortable with the house that you purchase and the debt that you are taking on. It can be easy to get caught up in the excitement of looking at houses that meet all of your needs and desires, but if it is outside of the budget that you are comfortable paying you will regret it in the end. Make sure that your first time home buying experience is a good one by choosing a house that you will sleep well in at night.

Following these 7 rules can help you along the path of becoming a Maryland first time home buyer. Your first step in getting the process started is finding an experienced agent that is an expert in your area, and I know just the team for you!

Malcolm Lawson

Malcolm Lawson

Maryland REALTOR at Keller Williams Select Realtors
Malcolm is an 11 year Air Force Veteran and is a part of a family team of Maryland REALTORS along with his wife, mother and sister in-law.

410-443-8140
Malcolm.Lawson@kw.com
Malcolm Lawson

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