10 things you should know when buying a home.
1. Don’t buy if you aren’t going to stay for a good long while.
If you’re not committing to residing in one place for more than a few years, then owning your residence probably won’t serve you well, at least not yet. After the transaction costs of buying and selling your home, you’ll wind up losing money by selling sooner.
2. Start by cleaning up your credit.
You will most likely need to secure a mortgage to purchase a house, so making sure your credit history is as good as possible is a must. Months before you start house hunting, be sure to get copies of your credit report. Make sure facts are correct, and fix any problems.
3. Look for a home you can comfortably manage to pay for.
A good rule of thumb is to buy housing that runs about two-and-one-half times your annual salary. You’ll do better using one of many calculators online to get a better understanding of how your income, expenses, and debts affect how much you can afford.
4. If you can’t put down 20%, you may still be eligible for a loan.
There are a number of private and public lenders who, if you qualify, can offer low-interest mortgages that require a smaller down payment.
5. Get professional help.
Though the Internet offers buyers exceptional access to property listings, most new buyers, and many more experienced ones, will do better using a professional real estate agent. You want an exclusive buyer agent in your corner who has your best interests at heart and will help you with better strategies during the bidding process.
6. Buy in a neighborhood that has good schools.
This advice applies even if you don’t have school-age children, because strong school districts are a top priority for most home buyers, and help bolster property values.
7. Get yourself pre-approved before house hunting.
Getting pre-approved and save yourself the grief of looking at houses you can’t afford. That puts you in a much better position to make an offer you can afford when you do find the home you want. Don’t confuse this with pre-qualification, which is based on a cursory review of your finances, pre-approval from a lender is based on your actual income, debt and credit history.
8. Do your homework before bidding.
Your opening bid should be based on the sales trend of similar homes in the neighborhood. So before making it, consider sales of similar homes in the last three months. If homes have recently sold at 5 percent less than the asking price, you should make a bid that’s about eight to 10 percent lower than what the seller is asking.
9. Choose carefully between points and rate.
When picking a mortgage, you usually have the option of paying additional points — a portion of the interest that you pay at closing — in exchange for a lower interest rate. If you stay in the house for a long time — say three to five years or more — it’s usually a better deal to take the points, as the lower interest rate will save you more money in the long run.
10. Hire a good home inspector.
Sure, your lender will require a home appraisal, but that’s just the bank’s way of deciding whether the house is worth the money you’ve agreed to pay. You should hire your own home inspector, and preferably an engineer with experience doing home surveys in your area. Their job will be to point out problems and potential problems that could require expensive repairs now and down the road.
Give me a call to help you cover all your bases for a smooth home buying experience.
Thanks, Harriet Robertson