Buying a home is a huge decision, and possibly the largest purchase of your life. Before you get started become educated on the home-buying process and all it entails. Below are a few things you should know ahead of time.
What You Can Afford
You find a home and fall in love. Unfortunately, you find out that what you can afford is well below the asking price of your dream home. It happens every day to first-time home buyers. Instead, see a mortgage broker first to find out what a lender is willing to loan.
Clean Up Your Credit
The first thing a lender does is pull your credit report. If your credit is fair, you’ll pay a higher interest rate and have fewer options for borrowing money.
Acquire a copy of your report at least a year prior to your search. This way you have time to raise your credit score. Reducing your debt, especially credit cards, and making timely payments will help to raise your score.
The Wish List
New home-buyers have a long list of items they want to have. The key word is “want”. When you look at a home space, structure and flow are most important. Areas of the home such as the kitchen and living room are places where families congregate. Those rooms need space. The backyard doesn’t have to be worthy of a magazine cover, it just needs room to add the amenities you want in the future like a swing set, pool and an outdoor sink cabinet to create an outdoor living space for entertaining.
There are many costs to buying a home, both at the time of purchase and after ownership. Make sure to factor in these costs. Otherwise, you’ll put yourself at risk of losing it down the road. At time of closing, you have property and school taxes, homeowner’s insurance and the representation fees, attorney fees, loan origination and interest fees.
Fees that you will incur thereafter annually include property and school taxes, homeowner’s insurance, and maintenance. A home, even if a new one, will continue to cost money.
Consider What’s in Your Future
Most people take out a 30-year mortgage when buying a home. That is a long time to remain in one place and in the same home. If you’re buying a home right after you marry, take into consideration if you plan on having children, whether you’ll change your employment or want to relocate to another state. Otherwise, you’ll have a home that doesn’t serve your needs within only a few years. If you buy during a seller’s market and it becomes a buyer’s market, then your home may lose value and selling may not be an available option.
Contracts are Negotiable
It’s a very intimidating process buying your first home. So many papers to sign. Many people are grateful to find a home they love and rush to sign without bothering to ask for anything from the seller. A purchase price is always negotiable and regarding a pre-existing home, you can ask for a credit on things like an older roof, plumbing and property damage. This is where having a reputable attorney pays off. Don’t hold back. Speak up now prior to adding your signature to the contract.
You may think you can find a home without a realtor, and you can. However, a good agent knows the area. They know if the price is fair. They also take information from you and conduct a search of the homes that fit your basic needs. This will save valuable time on your end. Look for one that’s reputable, with many years of experience and one that matches your personality.
Buying a home is possibly the largest purchase of your lifetime. From home designs, amenities and location, it can make your head spin. Make sure to educate yourself ahead of your search so that you know what to expect, as well as the costs involved.
partnered post • cc-licensed image by Tony Mariotti