Getting The Best Out of Your Home Buying Experience

| July 6, 2017 | 0 Comments

home buyingDeciding to purchase a home is an exciting time. Becoming homeowners, although stressful, is a decision that many adults dream of and are excited for. Renting can become a hassle, and it’s nice when you can finally put down roots with your first home purchase.

You can finally paint the walls green if you want to, replace all the carpet with hardwood, and hang curtains without having to worry about a landlord penalizing you.

As with all huge responsibilities and life changes, buying a house can easily take a turn for the worse, whether it’s your first time buying a home or if you’re a self-proclaimed home buying expert.

There are a few tips to make sure you don’t get the short end of the stick when you’re searching for that dream home.

Deciding whether or not to pick a realtor

This is one of the first big debates that comes up when you’re trying to decide how to proceed with your home buying venture. Some people recommend buying a house sans realtor to save yourself on costs.

If you’re considering this route, keep in mind that the cost of a realtor is actually paid by the individual selling the home. They make a percentage of the commission from the overall house sale. So getting a realtor to help you find a house doesn’t cost you a penny.

One reason to choose to go with a realtor instead of doing it alone, is that an experienced realtor will be able to notice things that you might not; things that are wrong, broken, or sketchy in the home that you wouldn’t have thought to ask or look for.

They’ve been trained to get you the best possible deal, and in a lot of cases they can negotiate a significantly lower price than the asking price.

If you choose to go without a realtor, and the individual selling the home also doesn’t have a realtor, you can potentially save on closing costs. But without a negotiator, you may have a hard time having them cover the cost of any repairs.

Preparing for fixing things up

home buyingSpeaking of repairs, remember that it’s a part of the home-buying process most of the time. The reason that there’s such a big business in flipping houses is because homebuyers are often scared away by the prospect of doing their own repairs.

However, we’re often willing to add a lot more to how much we pay for a house in order to skirt this bother. If you’re looking for a good deal on your house, you should go into it ready to do a few repairs yourself.

So, it’s a good idea to go into it with a budget already set aside for repairs. Of course, you don’t want to be surprised by the things that you end up needing to replace or repair.

A good home inspection will help you be aware of what needs to be done. Make sure that you get the home inspection done before you finish the final sale on a house, and be there for the appointment so that you can see for yourself the things that are of concern.

Get quotes on all your planned changes. Some repairs are cosmetic and will only be a matter of a few hundred dollars. Other things, like installing an air conditioning system, or making major changes to the plumbing infrastructure, will be large expenses. However, they can usually be easily absorbed by how much you save on the price of the house.

Determining your budget

The first step in figuring out how much you can spend on a home is to talk to a loan officer. You can choose to go with a mortgage broker (your realtor, if you choose to use one, can usually recommend someone that they trust), or you can go directly through your bank or credit union.

You can choose to get quotes from both a broker and your bank, but keep in mind that they’ll both have to make hard inquiries on your credit, which will affect your overall score afterwards. If you have a relatively good credit score, it won’t make a very large difference at all, but it’s still something to think about!

Your loan officer will tell you how much they can lend to you via a mortgage loan. The amount will vary based on your credit score and how much money you are able to use for a down payment.

The larger your down payment, the smaller your monthly payments will be. It’s absolutely possible to buy a house with a 0% down payment, but your budget will be significantly smaller, as the bank won’t be willing to lend you as much.

You’ll also have larger monthly payments and in a lot of cases, much higher interest rates.

Understanding the cost

There are a lot of things that go on behind the scenes when you buy a house. You’re not just paying for the house, but when you start making your payments, you’ll also be paying for homeowners insurance, utilities, and property tax. Sometimes, you’ll also have to pay for homeowner’s association fees.

If you’re nervous about how expensive buying a house is, make sure you sit down and make a realistic budget. If you know you can make your mortgage payments every month, you shouldn’t have anything to worry about.

Ask your loan officer if there are penalties to paying off your mortgage early (most are 30 year mortgages, but you have the ability to pay them off early if you’re able to). If you get a high interest rate, you should have the option to refinance your loan in a few years, which will significantly lower your monthly payments.

If buying a house is something that you really want to do, don’t let all of the small facets deter you. Buying a house is a great investment, as long as you know you can make your monthly payments. It also helps build your credit and build equity. There’s a lot of truth behind the saying that real estate is the best investment.

Tags: , , , ,

Category: Home Hints

About the Author ()

Leave a Reply

Your email address will not be published. Required fields are marked *

CommentLuv badge