Steps to Buying a Home
Tips For Buying a Home
Buying a home is one of the biggest financial decisions we will make in our lifetimes. It is, for most of us, the most expensive possession we will ever own. Before embarking on the home buying journey, it is important to have all the necessary information to make the best housing choice possible.
A realtor can help you navigate the process and tell you what you need in terms of financing and setting realistic goals. No matter if you are a first-time homebuyer or have owned and sold many homes over the years, the current market can be difficult to navigate on your own.
Here are some tips our team of real estate professionals at HomeHunt has come up with to help you on the path of buying the home of your dreams.
Start Saving Early
There is no standard percentage of your home’s purchase price you need to put down for a down payment. But you will probably need a certain amount to get a mortgage. Start saving early so you can put down at least 3% of the sales price for a conventional mortgage. Remember, the more you borrow, the more you’ll pay each month for your loan.
It is also important to remember that most homes will require some work before you move in. Consider those costs as well when factoring in how much you need to have on hand before you buy a home.
Watch Your Spending
Your credit profile is key to helping you buy a new home. Try to avoid expensive purchases for up to six months before you intend to purchase your residence. Potential lenders will closely examine how many credit cards you have, your total debt, and other expenses when deciding on whether to approve your loan. You do not want to lose the chance to buy the home of your dreams because you maxed out your credit card and hurt your credit score.
Check Your Credit Score
Make sure you view your credit report from each of the three major credit reporting agencies: TransUnion, Equifax, and Experian. Information from these agencies is used to come up with your credit score, which is calculated with software from the Fair Isaac Corporation (FICO). The score can range from 300 to 850. Scores above 670 are considered “good” and will help your pay lower interest rates on loans.
You can get free reports from all three reporting agencies at least once each year. If you find any errors in any of the reports, you should dispute them immediately so that they can be resolved before you apply for a pre-approval for a mortgage and any other loans.
There is no doubt that getting pre-approved for a mortgage is one of the best ways to start the process of buying a home. It requires a lender to look at your total financial situation so that you can be confident in the amount of the loan you will receive.
Sometimes, it can be difficult if the amount you are approved for is not as much as you hoped. But it saves a lot of time and energy since you can screen out homes you can’t afford.
Once you are clear on what exactly you can afford, you are ready to start the home search. A realtor can be a key partner, as they have the inside knowledge of the market and have access to a wider range of listings. They can help every step of the way from your initial search to negotiating the best price and having a partner at the closing.
Here are some tips for when you start the hunt for a new home:
Put in the Time
Take the time to look around at a variety of homes in your price range to find the right place. That may mean expanding the location range you are considering. While you may not be able to afford a house with more bedrooms in one town, maybe you will be able to find the right one in a neighboring town. You and your family will need to decide what is more important. It is less likely you will make a costly mistake if you take the time to consider all the options.
Get to Know the Neighborhood
Before you decide on where you want to live, visit the neighborhood at different times and days of the week. You can also drive by any homes you are interested in pursuing at different times to see how quiet or active it is. Make sure to scope out how close the stores are that you are likely to frequent, how easy it is to walk to places, the availability of public transportation and bike lanes, and levels of traffic at different times of the day.
School systems can also be an important determinant for property values, so it pays to know how schools rank even if you do not have children.
Pay Attention to Property Taxes
Be sure you know the potential property tax bills of the homes you consider and the neighboring homes as well. Remember, many towns reassess homes on a yearly basis. If that is the case, you will need to factor that into your budget.
You should start assessing whether a potential home is the right one when you first arrive. You can ask to find out how old the roof is. Remember, if it is older than 15 years, you will likely need to replace it within a few years. This is a costly endeavor, so you will want to know ahead of time and consider this information if you decide to proceed in making an offer.
Trees are Lovely, But…
Trees are lovely and can offer majestic shade on a hot summer day. But they also can pose a risk if they are too close to your home. These risks can include falling on your home during a storm and damaging your roof. There are also less serious issues like roots getting into the foundation or sewer line. Tree removal can be exceedingly difficult, ranging from getting permits to extremely high costs of cutting down the trees.
A Crack in the Wall
Check the walls for cracks. While small cracks often turn out to be minor, larger ones or any discoloration could mean there are structural problems or leaks.
Water on the Ground
A rainy day can be a good time to see a home, particularly when going in the basement. You will be able to see firsthand if the basement is dry. If you visit on a sunny day, and the basement is damp, there may be a serious issue that you will want to ask about.
Get the Background
If you are interested in a property, go to the local town hall to check on any potential building violations and permits. It is also important to know if any renovations or other work was recently filed with the local building department and to make sure the appropriate paperwork was completed. You don’t want to be in a situation where shoddy work could potentially create a dangerous situation.
Don’t Buy Without a Checkup
Once you decide to proceed on making an offer on a home, you almost always want to hire a home inspector. A good inspector will provide you with important unbiased information as to the state of the property. If there are any serious issues, you want to know ahead of time because the repair costs could be significant. You may also want to reconsider the amount of your offer to factor in those costs and renegotiate the price.
Contact us to start your buyer/seller journey!