If you are on your way to purchasing your first home then congratulations! This is an exciting time in anyone’s life, but before you get overwhelmed or too excited there are some home buying tips that everyone should be aware of.
1. Be Prepared To Buy
The first tip, and the most important step, is being prepared to purchase a home. This process may take months or years, but it will save you so much time and stress during your home buying process. The step begins by making sure you qualify for a mortgage. To do this you can reach out to your bank, or any bank that may be in your area. Dealing with your own bank makes things move a little easier though because they already have your information on file and can quickly check all of your financial information. You can also apply for a mortgage online but if you need assistance you have to make a phone call rather then being able to see someone face to face like you would going through a local bank. Qualifying for a mortgage includes meeting some eligibility requirements. These requirements help determine what type of loan you are able to receive. They include being able to give a down payment of at least 3% of the cost to purchase the house, a debt to income ratio of 50% or less, and a minimum credit score requirement of 580 for an FHA loan or 620 for a conventional loan. If you surpass these requirements and have a low debt to income ratio and are able to put down a larger amount of money and have a higher credit score, then you will get better rates and save money in the long run.
2. Know Your Budget
Secondly, it is important that you make sure you know your budget. There is nothing worse then finding a home you get all excited about just to have your dreams dashed because you cannot afford it. It is wise to be realistic about what you can afford and go from there. Also, it is important to note that just because a lender has approved you for a certain amount it does not mean that you can automatically afford the monthly payments that come along with the house. You must account for the additional costs of interest, home owners insurance, water bills, electricity, cable, private mortgage insurance (PMI), and money that may be put into escrow. Other costs lots of homebuyers do not take into account are groceries, gas, landscaping, furniture, HOA fees, and any maintenance or repair costs. You know better then anyone what you spend your money on and what you can afford so it is smart to keep track and know what you can handle before searching for a home.
3. Know What To Expect
Thirdly, it is a great idea to make yourself familiar with the whole process of home buying. Knowing what to expect will make things run more smoothly and give you less of a headache when you run into problems that may arise. You cannot anticipate all the situations that may pop up or things that may go wrong but having an idea of how things should go will get you far. As we discussed earlier with qualifying for a mortgage, it is essential to go ahead and get pre-approved for a loan. They will look at your assets, credit, and income.
Once approved you will know the price range that you can start looking at homes in. If you skip this pivotal step you can find yourself looking at homes well out of your actual price range. This can cause you to fall in love with a home you cannot afford. Now you have wasted time and energy that could have been spent into a home you can afford.
Next you will want to start saving for any additional costs or fees that may come up during the home buying process. This includes earnest money, closing costs, home inspections, and any repairs that the seller may not agree to cover. Once you have that set it is a good idea to start shopping for a realtor.
Look for an experienced and well-rated realtor that is local to the area you are buying in. This way the realtor you choose will have extensive knowledge of the community you will be moving into and can show you properties that are worth your time. Finding a home is much easier with a realtor by your side. They also have great knowledge of the whole process and are a wealth of information and support.
Now the real fun begins. You are ready to start looking at homes! You can begin online to see what is available and what you are interested in actually going to take a look at. Another option is to pick a neighborhood that you like and drive around looking for open houses. Even if you aren’t interested in that particular home, it is a great idea to take a look and verify what it is you are looking for in your future home. Once you have found the home you are looking for it is time to make an offer and put down the earnest money. This tells the seller that you are serious about purchasing their home.
Next you will want to hire a professional home inspector to make sure there isn’t any major damage or serious repairs needed.
4. Hire A Professional Home Service Provider
The fourth tip in home buying is to make sure you surround yourself with professionals. From searching for a home with a real estate agent or real estate agency, inspecting a home, cleaning a home, and closing on a home, having a professional who is trained and well reviewed will take off so much of the burden from your shoulders.
“A realtor will help you with the entire home buying process. They can also help with the legal documents and ensure you are filling everything out correctly and that you have a clear understanding of what you are signing.“
Choose A Quality Home Inspector
When it comes to the inspection of your future home you really want to hire a professional home inspector you can trust. The one we have highlighted above is 5-Star rated with hundreds of reviews and multiple awards. Your real estate agent can also help you find a qualified home inspector since they have made connections over their many years in the business. A competent home inspector can save you hundreds, if not thousands of dollars. If they find hidden damage or a cracked foundation it can even help steer you away from a home that could turn into a money pit.
Start Off With A Perfectly Cleaned Home
It is a great idea to hire a professional cleaning company to come in and do a deep clean on your new home. If you find the right cleaning company then they are more then qualified and they are used to doing such cleanings. One of the last things you want to worry about when entering your new home is cleaning it top to bottom. Let someone else do that for you and just relax and enjoy your new home. When closing on your home it is a good idea to either have your realtor look over the final documents or you can even go a step further and hire a real estate lawyer to ensure everything looks right.
5. Be Detailed, Flexible But Firm
The fifth tip is finding your perfect home. Make sure you let your realtor know all the information. This includes what type of home you are looking for, the must haves, and the deal breakers. Let them know your budget and any ideal neighborhoods you like. Sending your agent links to homes you have seen online will also give them good information on what you are looking for.
Ensure that you don’t have too many restrictions or requirements; this could lead to ignoring a home that could be the perfect fit but at the same time don’t settle as this is one of the biggest decisions you’ll make in your lifetime. It is crucial that you actually go to any home you want to purchase. Pictures do not show the whole story and they can be taken in ways that hide things. It’s also and great idea to take a look around the neighborhood and community to see that it fits your needs and lifestyle.
6. Make An Offer
The sixth tip is, after finding the home you love, making an offer. This is a great time to utilize your realtor. They can help you decide how much to offer so that it isn’t considered too low by the seller or so high that you can’t end up affording it. Once the offer is submitted the seller can accept outright, decline, or send back a counteroffer. Your realtor will help with the negotiating and make sure it ends up being a fare offer. There is the chance that the seller won’t budge and you may have to give up and start looking for another home. Don’t let this discourage you though. You will find the home that is right for you.
7. Be Prepared For The Closing Process
The seventh, and last tip to home buying is to know the closing process and what to expect. There will be a lot of paperwork and lots of signing, but this is the most exciting step of the whole process. You are on your way to being a homeowner. Homeowners insurance will need to be purchased before the closing, legally you must have it.
The closing disclosure will be in the final paper work and it includes a summary of the final costs of your home loan. Acknowledgement of this document must be received before you will be allowed to move forward with the closing. Be prepared to have a government issued photo ID, cashier’s check for closing cost, and proof of homeowners insurance with you at closing.
Last but not least you will complete a final walk through of your home to ensure the property is still in the condition it was when you agreed to purchase it. This is also the time to make sure all repairs were completed and that all the appliances that were to stay in the home are there and are working properly. Once this is all completed the keys will be handed over and you will officially be a homeowner!
