One of the most important goals people try as much as they can to achieve is purchasing a home. There are many aspects to look at so that you ultimately end up in the home and mortgage that is right for you and your family even as exciting it can be and rewarding. Below are 8 things to know before purchasing a new home.
Is your credit where it should be?
The first thing is to know your credit score when you want to buy a home. The kind of loan you will be able to get will be determined by your credit score, what your mortgage rate will be and what assistance programs you can qualify for is also influenced by your credit score. It is imperative for you to check your credit score before you begin the home buying process as this will give you the opportunity to assess any problems and repair if necessary.
Can you be pre-approved?
It is essential for you to obtain a pre-approval before you start shopping for a home. You will be able to search for homes with the confidence of knowing a lender will approve you for a loan, how much the lender will approve for you and what your finance rate will be will also be in check. You have the opportunity to fix any problems you need to before falling in love with a house if the lender is not able to offer pre-approval.
How much home can you afford?
While the lender may approve you for a specific mortgage amount, that doesn’t mean you need to maximize that amount. Often, you can find a home that works for you for much lower than the amount available to you. Doing this can be beneficial to your bottom line as the more the home costs, the higher the monthly mortgage payment. When a buyer gets into a home that they can pay for, but that leaves no further wiggle room in their budget, it is called being “house poor.” Spending too much on a home can be dangerous financially as an emergency or job loss can risk house payments not being met.
Do you have enough for a down payment on a home?
There are different down payment requirements that can typically range from 3%-20% of the loan with different mortgage loan programs. Be ready to pay for a required amount when you close on your home purchase. You will be able to find an assistance program that can help you with some or all of the down payments needed by checking with your mortgage lender.
What requirements do you have for a home?
You are expected to have a clear idea of what you and your family need in a home before beginning your search. You can make a list of what is crucial to your decision. Some of them are number of bedrooms, bathrooms, school districts, square footage and yard requirements are examples of important things to consider.
What location is right for you?
Realistically, you may not be able to find the home you want in your preferred area. Investigate other areas that may be reasonable alternative options and know what you’re comfortable with and what may not be feasible for your family. An experienced realtor can help give valuable insight in this area.
How do you choose a realtor?
Choosing your realtor is crucial because they’ll be your advocate throughout the entire home buying process. Pay attention to these critical things when making your decision:
- Is the realtor local? You’ll want someone familiar with the area, as they can provide valuable insight and options of which you may otherwise be unaware.
- What do recent clients have to say about the realtor? Ask the realtor or their employer for a list of references you can contact.
- If you’re considering a realtor, pay attention to their listings and how closely they match the actual property. The results are a good indication as to the honesty and integrity of the realtor.
- Ensure the agent has the right licensing and credentials necessary to sell in your state. When verifying with the agency in your state that regulates the requirements you can also check for any history of complaints on the realtor.
Does the home have HOA fees or other special fees or taxes
Make sure you always remember to ask about any additional costs you may see in purchasing a particular home before you seriously consider moving forward with it. Things like Home Owners Association (HOA) fees, additional taxes or any other regular fees that may be associated with the home or neighborhood should be asked about so that you are not surprised with fees later.