By Geoff Williams and Annalisa Burgos, FrontDoor.com | Published: 10/07/2009
Life is full of exciting firsts. Your first steps. Your first day of school. Your first love. Your first job. Your first place.
Whether you want to move out of your parents' home for the first time, own a home after renting for years or buy a place with a spouse or partner, purchasing your first property is a big step. It takes a lot of preparation when you're in this stage of your life, and a little luck never hurts.
Brittany Frey, 24, may be a little younger than the typical first-time homebuyer, but she probably speaks for most of them when she talks about why she bought a house.
"I've been working at the same professional job for the past three years and feel like I'm ready," says Frey, who lives in Buffalo, N.Y. "My rent has ranged from $600 to $800 per month, and that's a lot of money to just throw away. And," she adds, "I think I was just sick of renting."
Frey is one of the lucky ones. With no house to worry about selling and it being a buyer's market, Frey could afford to take her time looking -- and then pounce. After looking at 40 houses and condos, that's exactly what she did, and she is very pleased with her purchase.
Renting instead of buying a home may seem like the most convenient or most affordable way to go. It pays to do some simple research to understand the pros and cons of buying versus renting. You may find that owning a home is actually your best option.
Watch videos of house hunters starting out and buying their first homes >>
HOW YOU KNOW IT'S TIME TO BUY YOUR FIRST HOME
When you learn to drive, most states allow you to get a learner's permit at age 15. Any teenager thinking of joining the military knows you can't enlist until you're 18, or 17, with parental consent. And every teenager knows that it's not legal to drink until you're 21. Most folks know that no matter how ambitious you are, you can't be elected president until you're 35.
But buying a house? There is no age restriction. Some might argue you can't buy a house until you're 18, because a bank won't let a minor sign a contract, but theoretically, if you had the cash and your parents were cool with it, you could be a toddler. Or you could be a senior citizen; this writer's grandmother bought her first house at the age of 77 and is still enjoying it, almost eight years later.
It's safe to say you're going to be somewhere in between those ages -- and you're going to hear a little voice, just as Frey did, that says, "It's time."
That's largely how Heather Clark, 27, general manager for Chicago Sailing, and her boyfriend, John Honkala, 32, a Web design business owner and part-time bartender, came to buy their house.
"We were planning on moving in together and expected to just rent an apartment," says Clark, but she and her boyfriend changed their minds when they realized how inexpensive houses were becoming. But even without the lure of the financial incentives, it felt like it was the right time.
Clark says that they were both sick of moving, of dealing with landlords and of living in dated quarters. "My old apartment has been described as '80s Florida chic," quips Clark, referring, in part, to her "plastic vertical Venetian blinds."
WHAT TO CONSIDER BEFORE BUYING YOUR FIRST HOME:
Interest rates have crept up, but refinancing may make sense for you.
Purchase price, interest rate, taxes and PMI determine your monthly payment.
Find out if owning a home will save you money.