Buying a home is an exciting time in the life of just about any home shopper. Before you start visualizing where you are going to put the new sofa, there are a few things that you should take into consideration. Here are a few useful tips that can help the first time homebuyer get the home and mortgage of their dreams.
Before going house hunting, it helps to know what you are qualified to buy. Home sellers also seem to deal with you better if they know you’ll pay your bill after the deal is made.
I’d suggest getting preapproved from a well known bank. You don’t actually have to use them once you need the actual loan, so you will still be able to shop around. I’d also suggest only getting preapproved for an amount that you are comfortable with so you never feel inclined to buy over budget.
My husband and I were preapproved initially for $200,000 but I would have gagged if we had ended up buying a house that expensive based on what we were making in 2007. I asked for them to only write me a preapproval letter for $130,000. It helped our real estate agent stay on target as well.
Get a Qualified Home Inspector
You can always take your uncle along to inspect the house but he won’t be able to detect all of the structural problems that may exist in a home. You should hire a home inspector with a track record for inspecting the type of home that you are buying. A good home inspector can point out potential warning signs to keep you from making a bad purchase.
We got unlucky on the first home we made an offer on – the home inspector missed a whole wall of black mold in the attic! If my mother had not been thorough, I’d have died of an asthma attack a year into owning our first house. I waited to get the seal of approval about our home from my parents before we even made an offer and had it inspected. It feels good to know that my parents actually said that they would have bought our house as a rental property if we hadn’t made a deal ourselves.
Put Down 20%
There are a couple of great reasons to put down at least a 20% down payment on your home. First, if you have at least 20% equity, you don’t have to pay a monthly PMI charge. This is actually you paying for insurance for the bank. How annoying is that? Secondly, you will have smaller payments. Plus, you get the emotional benefit of starting off with equity. Trust me, it is a nice feeling.
Buy in a Good Location
Location, location, location. A home in a good area will resell better than a home in a bad neighborhood. Also keep in mind school districts whether you have kids or not if you ever plan to move since your future buyers may in fact care. I’d also personally suggest driving around the area your favorite choice is in to make sure that it has all the things you’ll need to be happy. My husband and I checked out the parks, distances to the grocery stores, restaurants, and pharmacies.
What other home buying tips have I missed?