Buying a home is a big decision, both emotionally and financially. This is the reason it is important to exercise caution at each step. This is not something you can decide overnight. You need time, planning, and expert guidance to ensure that you are headed in the right direction.
Considering it is a huge investment, here are some important tips that will help you make an informed decision.
Are You Ready to be a Homeowner?
Owning a home is everyone’s ultimate dream. However, between renting and buying, the latter is obviously more expensive and much bigger undertaking. You are not just investing once in buying a home, it is a commitment of a lifetime that requires you to pay for maintenance costs that will arise from time to time. Additionally, you will also have to bear the additional cost of taxes and insurance. If you are not careful from the start, then the costs will add up before you know it. This is why it is important to seriously consider if you are ready to be a homeowner yet. If you are mentally prepared, then it is time to prepare yourself financially. Pay up all your debts and start saving up for the big dream.
Look for Loan Options
Once you have decided to buy a home, the next step is to start looking for a loan. However, before you do that, get yourself pre-approved to know that you are eligible. This will not only save you the heartache of being denied halfway through the process but also define the price range to narrow down your choices. Assuming that you got yourself pre-approved, talk to at least three lenders before deciding the final one. You can also take help from a mortgage broker who can help you in finding the best rates and favorable loan terms.
Don’t Overestimate your Payment Capacity
Don’t make the rookie mistake of miscalculating your repayment abilities. A safe practice is to align between 25 and 30 percent of your income to mortgage payments, taxes, and insurance. Experts like HomesinMeridian.com recommend that your home value should not exceed two and half times more than your annual income. Biting off more than you can chew is one of the most common mistakes made by potential homeowners that can introduce them to a world of problems later.
Work with a Professional
After getting your financials out of the way, now is the time to look for the right realtor who can help you find your dream home that meets your budget and expectations. They should be able to offer you multiple options so that you can have a few alternatives to choose from. Your realtor not only helps you find your home but also helps you in negotiating favorable terms with the seller when you make an offer. The best way to find a good realtor is to start asking your friends and colleagues for recommendations.
Ask for Home Inspection
This is yet another important step in buying a home. Do not confuse home inspection with an appraisal. As a buyer, you need to pay for the home inspection. The inspector will visit the property and look for potential issues that your buyer may not have disclosed to you. This may seem like an extra step, but it is important to protect yourselves from any rude shocks later. From molds to a weak foundation, these inspectors are trained to find all the skeletons hidden in your seller’s closets! At the same time, if you come across problems that are repairable, then you may be able to negotiate a better sale price for the property.
Patience is the Key
After the seller accepts your offer, the next step is escrow. It is the escrow holder’s responsibility to ensure that all the documents and money is exchanging hands in a regulated manner. Escrow is beneficial for not just the buyer but also the seller and the lender. However, it can be a time-consuming process that can be irksome to the buyer. But staying patient will help you safeguard your investment.
Close the Deal
With all the steps complete, it is now time to close the deal and get keys to your new home! You can start packing up, planning the new décor, painting walls, and begin the process of turning this house into your home. It is also the right time to set up the utilities at your new address. Starting the process simultaneously will help you settle in faster.