Buying a home is always an exciting venture. Whether it is newly built or an older home in need of repairs, the fact that you are acquiring a home all your own is probably a dream come true. However, there is an enormous list of things to know and consider before you sign on that famous dotted line. In this article, we are going to look at a few essential tips for those about to buy a home. Some of these tips are basic, but often overlooked, and others are a bit more creative but incredibly cost effective (something you’ll come to love after buying a home).
How Much Can You Afford
There is an endless list of calculators and online tools that can help you determine how much house you can afford or what a monthly payment for a specific home might be, but it is really only you who can decide precisely what you can realistically afford. The only way to do that is to get an official pre-approval. This is a calculation based on all of the realities of your financial situation, including your credit score, debt to income, and more.
As the experts at For Sale By Owner have said, “Your existing debt level also dictates your mortgage limit. Student loans, car loans, credit card balances, child support and other non-negotiable financial obligations are factors that determine how much mortgage debt your household can shoulder… The lender will review your calculations and documentation to confirm or adjust the maximum mortgage that you qualify for.”
With a very clear idea of the total home price available to you, it is the time to explore the different homes that fit into that figure. Keep in mind that condominiums and other similar properties have things like Association fees that boost your monthly outlay. The type of mortgage you choose also makes a huge difference, with a 15 year usually offering a lower interest rate but much higher monthly payment. However, if you can get rid of a mortgage in 15 years, it is a fantastic way to enjoy financial freedom, equity in your home, and more.
Choosing a Home
A report on first time home buying from NerdWallet says that buyers also need to:
- Pick the right neighborhood – Research the schools, nearest hospitals and shopping, amenities and more. Look at noise levels and traffic patterns to ensure the kind of lifestyle you desire.
- Make the most of an open house – They advise you scope out the neighborhood, neighbors and take a lot more time on your own to explore every little detail about a property, giving yourself the chance to examine the home without a lot of pressure from a seller.
- Let little things go – This may be the best bit of advice, which is simply to ignore superficials like paint colors or carpeting and focus on the critical issues like the structure, foundation, and various systems.
- Consider an FSBO – A For Sale By Owner property is a way to eliminate the costly middle people and keep money in your pocket as well as that of the seller. You can get a better deal, negotiate without delays and typically close a deal faster.
These tips for home buyers should help you get into the home of your dreams right away.