Top 10 Home Buying Tips
Whether you are a first-time home buyer or seasoned pro, you still should know these top 10 home buying tips to simplify the process.
Here is what to know when looking to buy a house:
Research Before You Buy
Before buying a house, it is vital that you do your research. This is especially important if you have or are planning to have children. Research the area schools, parks, playgrounds, and sports facilities. Check out the grocery stores, restaurants, and neighborhood. Drive through the area during after school and weekend hours. Even if you do not have children, the area’s schools can impact the value of your home in the future.
Included in this tip is knowing what features are important in your new home. Research what other comparable homes have sold for in the area. Of course, if you are not up for all of this research, you can talk with a reputable professional realtor who will guide you through the home buying process. Buying a home is a huge investment – you want to get it right.
Determine Your Budget – and Stick to It!
When using a mortgage calculator, most lenders use a 28% formula. That means you cannot exceed 28% of your monthly household income for your mortgage payment. Also, consider your other monthly bills and expenses, such as expensive car payments and college loans. You may want this number to be lower.
Falling in love with something out of your reach is easy. Be firm with your budget and let your realtor know that you do not want to look at any homes outside your range.
Get Pre-Approved – Not Pre-Qualified
Pre-qualified means you earn enough money for a loan of a certain value. Pre-approved means the lender has reviewed your financial information and agreed to offer you a pre-determined mortgage amount. Sellers prefer to negotiate with someone who is pre-approved.
A benefit of pre-approval is that you have already done your homework and researched different mortgage companies and interest rates. An important aspect of this one of the top 10 home buying tips is knowing your credit score before you approach mortgage companies. You do not want to have numerous credit checks come up while you are engaged in the home buying process.
Select the Right Loan
Some people think that an adjustable rate mortgage (ARM) will allow them to get a more expensive home now with a lower interest rate for the first few years. This is an excellent option for someone who works in a field where salary increases come yearly. If you know your income will be higher down the road, you may be able to handle the rate increase at that time.
Fixed rate mortgages stay the same over the duration of your loan. There are also FHA and VA loans that you may qualify for. Your professional realtor may also be able to recommend mortgage companies for you to contact.
Know the Closing Costs
One of the crucial steps to buying a house is knowing the closing costs upfront. The last thing you want is surprises at the closing. You may have to pay mortgage insurance, title search, points, and other fees. Expect to pay between 2 and 5 percent of your loan amount in closing costs.
Another concern to consider is homeowner association fees, property taxes, maintenance, repairs, and utilities. Can you afford to set money aside each month for problems that may arise? If not, you may find yourself in financial trouble if your water heater or air conditioning unit breaks down.
Another essential aspect of how to buy a house is to ensure that the home inspection covers all your concerns. If mold, pests, lead, or radon are important to you, make sure the inspection addresses those issues. Be present during the inspection to ensure that the inspector checks all parts of the home, including any crawl spaces, the roof, and the home’s exterior. All faucets and appliances should also be checked.
Do not be afraid to speak up and ask questions of the inspector. You are about to spend a lot of money on this home, so ensure you get a quality home inspection.
Hire an Attorney and a Professional Realtor (Buyer’s Agent)
In our top 10 home buying tips, we often suggest to people to hire an attorney in addition to a professional realtor. These individuals each have distinct functions as part of your home buying experience. A realtor will help you find the right house and negotiate the best price. Most realtors also work with a qualified settlement or title agencies, as well as settlement attorneys.
A skilled settlement attorney will carefully review all documents before you sign them. He or she is there to help with any last-minute negotiations or legal issues that arise.
Do Not Buy Big Ticket Items before Buying a Home
Next up in how to buy a home is not making any large purchases in the three to the six-month time frame before you start looking at houses and mortgages. Remember, lenders will be looking at your credit profile. They may be wary if they see many inquiries, new loans, or recently opened credit card accounts. Save these purchases for after you move into your new home.
Know the Property Boundary Lines
Next up on the list of what to know when buying a house is knowing your property boundary lines. You want to see an accurate map of your property so that you avoid border disputes with a neighbor. Find out upfront if your neighbor is infringing on your property. If their trees are hanging over your line or fence, who is responsible for trimming them? These are issues to deal with in advance, not after the closing.
It is all well and good to find a home that is within your budget, but did you plan for moving expenses? Before you purchase, speak with a moving company or two to get an idea of how much the move will cost you. Then take that money out of your home buying budget and set it aside.
If you have any questions about our top 10 home buying tips, please do not hesitate to contact the team at Great Florida Homes at (954) 695-SOLD. We are here to help you sell your existing home or buy a new home in Coral Springs, Parkland, and surrounding cities.
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