If you’re in the market for a new home then there are some things you should consider as a homebuyer. Check out these 5 tips and make your homebuyer experience an informative one!
1. Don’t Take Out Full Loan Bank Offers – If the bank approves you for a $500k loan look for a house in the $300k -$400k range. Just because the bank says you can afford it doesn’t make it so. And you have to think about all the associated monthly costs that you will incur besides your monthly mortgage like the interest rate on your loan, home owners insurance, HOA fee, household bills etc. You want to make sure that whatever house you purchase you can still live comfortably and maintain your financial security.
2. Don’t Use All Your Cash to Buy the House – Once your purchase your home you may want to save some money for home improvements, new furniture, fixtures etc. But what you also need to consider is the additional fees that come with purchasing a home. Fees can include home appraisal, inspection, loan application, broker and closing costs and more which can add up quickly. You don’t want to have $0 left in the bank after you purchase your home so make sure to factor in those costs beforehand.
3. Talk To Your Potential Neighbors – Nothing is more valuable than talking to potential neighbors to get their thoughts on the neighborhood. Do they like living there? What problems have they had if any? Finding out what advice would they give a potential owner can really impact your purchase of a home in that community.
4. Ask About Community Projects – Finding out whether there are any potential community improvements, renovations, maintenance, HOA etc. decisions coming up will make a huge impact on your decision to purchase a home. You don’t want to walk into a situation where they are about to replace all the roofs of the homes, driveways need to be repaved, and the community is having an ongoing battle with residents not paying their HOA fees which can then mean that you as an owner will incur additional costs.
5. Have More Than 20% Saved for Down Payment – It might be in your best interest to have more than 20% saved to put on the down payment for the house because you don’t know how much that number could be until you get there. It would be horrible to get through all that paperwork and get to the end to discover you’re $5k short. Another benefit of having 20% equity in your new home is that you can forgo paying Private Mortgage Insurance (PMI). So just as a general note have more than necessary saved because it could be the difference in you purchasing a home or continuing to look.
Image: Ches Inc.