Know your credit score.
Your credit score is one of the biggest factors in what your loan terms will be. Know your score before you ever try to get a loan, and take the time to repair it if it is lower than 700. A good score which leads to a low-interest rate can save you tens of thousands of dollars over the life of the loan. See how to raise your credit score to get better loan terms
Know every expense.
There are a lot of fees that come with a home purchase above and beyond the mortgage. Insurance, repairs, association fees, property taxes – you should have the income and the budget to handle all of these things if they are relevant to your purchase. Real Estate agents talk all the time about additional expenses to consider when buying a home. The article covers seven costs buyers often forget about. You should also have some savings to cover emergencies with the home.
Know what you want.
Do you want a home or a condo? For many first time home buyers, this is one of the first dilemmas they will try to solve. In fact, many buyers will look at both because they can’t make up their mind. To make sound decisions, you should know the pros and cons of a condo vs. a house. More buyers will end up disappointed when picking a condo because they did not understand the ramifications of how restrictive they can be or how quickly fees can change. The appeal, of course, is usually for those buyers who do not have time for home maintenance.
After the excitement of buying the home passes, you will have to live in it for years. Make sure you are shopping for a home that will meet your needs and your lifestyle. More space is not always better. Lawns require upkeep. Being close to the things you like may wind up being more important than you realize. Understand you are not just buying a home but a location as well. One of the key considerations that many buyers miss when purchasing a home is knowing how to pick a neighborhood they will love. Often first time buyers focus too much on the house and not enough on the neighborhood.
Work with a skilled Realtor that knows your area.
Every neighborhood has its unique qualities that you want to be aware of before you buy. An agent that is well-informed about the area will also know what homes there are worth, which will help you avoid overpaying for a property.
Make sure you interview several different buyers real estate agents. Choose someone that is full time working in the business every day and has a recent history of successful sales. The better the real estate agent knows the area, the better equipped they will be in understanding the differences in market value from one property to the next.
Understand the actual value of any property you are buying.
Working with a real estate agent that understands market values in your area is critical if you want to avoid overpaying for your house. In addition to the actual purchase price, there are other fees like appraisal and inspections that can cost you more when you don’t understand the value of the home. Sellers and banks may not be flexible should you ask about adjusting the price later, either.
Buy what you are comfortable paying for.
You may be cleared for a loan that is far above what you are comfortable paying for. Lean on the side of caution and mortgage only as much money as you are comfortable with. There are a lot of home buyers who will mortgage themselves to the hilt only to find out later they are a slave to their home. Unless you want to be eating spaghetti dinners at home, every weekend don’t stretch beyond your means.
Try to see yourself in the home.
Sometimes when you view a home, it will be filled to the brim with the current owner’s things. Learning to see past the clutter to the potential of the home for you may allow you to find better deals than you would otherwise. This is why real estate agents often recommend to seller clients to clear all the clutter before listing their home for sale. Cluttered homes can sell for less money when those with a lack of vision can’t see past it.
Look for any water-related problems.
A home in good condition will keep water where it belongs. Exterior moisture should not be making its way inside. Water flowing through the pipes should be staying in those pipes. Any precipitation that falls on and around the property should be directed towards safe areas, like away from your foundation. Your roof should be functioning as intended. Buying somebody’s water issues is not what you want. Water issues have a direct correlation to market value, as well as marketability.
Know your plan for furniture.
If you have furniture you like, you will want to bring it with you. Make sure your new home can accommodate it. Or, if you plan on buying new furniture, you want to purchase a home at a price that leaves you with enough left over to furnish it. This relates back to item #8 – understand there will be additional expenses with owning a home.
Know the potential growth of your investment.
Buying a fixer-upper in an area that is growing more popular offers the possibility of an increase in the value of your home. In contrast, buying the nicest house in the area may not have much of an upside.
Consult with your real estate agent and ask them their opinion on the prospects for profit if the general area continues to rise in value. Will the home lag the market or be a stalwart? If the return on investment is necessary, this is surely something you should find out.