Buying a house is a big commitment, but it can also be the best investment, if you get it right. A home is one of the biggest assets you’ll have, and while there are many details to consider when buying a house, there are also plenty of resources and tools online to help guide you: from mortgage calculators to real estate listings. Check out this post for more information on how to buy your first house.
What should you consider when buying a house?
1. Location vs. Property Type: Size and type of home will differ depending on your neighborhood, but there are some things to consider before deciding on what you want. Size refers to the size of your property, and the type will typically depend on what kind of home you’re looking for. The difference between the two is that location determines the convenience and lifestyle of each neighborhood, while property type determines how much space you have to work with in your new home.
2. Your Budget: It’s important to consider your budget before any big decisions, and it should be a central part of that process. Every home can cost a different amount – perhaps the price you need to put down on your mortgage is just out of reach? Or maybe you have an extra $20,000 you’d love to put toward a down payment. Whatever it is, it’s essential to be realistic about your budget before you begin the search for your dream home.
3. Credit: Before you apply for a mortgage, you should check your credit score. The higher the score, the better position you’ll be in to get approved for a mortgage and receive the best interest rate possible. Read this post for more information about how to improve your credit score and whether you should repair or rebuild your credit before buying a house.
4. Insurance: There are many different types of insurance you’ll want to consider when buying a home. The biggest is a homeowners policy, but there are also policies to cover your belongings, or even policies for living in your home while it’s under construction. For more information about the ins and outs of homeowners insurance, check out this post.
5. Closing Costs: When you buy a home, you’ll have to pay closing costs, which include loan origination fees and settlement charges. The costs vary depending on the type of loan you choose, but they typically fall between 2% and 5% of the total loan amount. For more information about closing costs, as well as a mortgage calculator to help figure out what you can afford, check out this post.
6. Financing Options: There are many different types of mortgages available, and it’s important to know those options before applying for your own.
What should you do before house hunting?
1. Get pre-approved for a mortgage: Applying for a mortgage without an existing offer on the table is not smart business. It could limit your options when you’re trying to find a good house, and even if you find the property that’s perfect for you, it’s unlikely you’ll be able to move in right away. Before you begin the process of buying a house, make sure that your current financial situation is stable enough to cover all the costs involved. The good news is that getting pre-approved for a mortgage can take as little as two weeks. You can always contact one of our Mortgage Specialists below for more information and guidance about buying a home.
2. Decide on a budget: There is a difference between how much house you can afford and how much you feel comfortable affording. When you’re ready to start house hunting, you’ll want to have an idea of how much money you can dedicate toward your down payment, as well as the mortgage payments every month (on top of how much your living expenses cost). This will help keep you from getting distracted by homes that are beyond your reach, and will also keep you focused on finding a property that suits your needs within your budget.
3. Understand the process: It’s important to understand the length and complexity of buying a house. You will have to work with a real estate agent and likely a mortgage broker or bank, so you should know what to expect from each one.
4. Find your ideal type of home: To keep yourself rigorous while house hunting, it’s helpful to know exactly what you’re looking for in a new home.
5. Pick a realtor: A realtor can be a great asset when looking for your home. Not only do they have plenty of market knowledge to help you get the best deal, but they are also professional negotiators who can help you to get the most out of your purchase. Find the right real estate agent: When you’re looking for a realtor, it’s important to find one that you’re comfortable with and can trust. After all, this person will be your partner throughout the buying process, so make sure you are completely confident in their ability to help you find your dream home. You’ll also want to make sure that your prospective realtor is familiar with the local market in order to match you with the properties that fit your needs.
In conclusion, buying a home is a big deal, but it’s not as difficult or as stressful as you might think. The tips above can guide you to the home of your dreams.