If you are in the market to buy or build a house and need some advice for buying a new home, don’t be intimidated by the prospect. There are ways to make buying real estate easier, even if it’s your first time.
Decide What Kind Of Home You Need
Some first-time homebuyers make the mistake of buying a home they will grow out of, rather than grow into. It may be a good idea, depending on your short-term and mid-range plans, to buy a house you can grow into.
Some don’t plan to keep the home very long, and moving to a new home is expected. But for others who don’t know what the future holds, waking up in a home that is getting too small is something to be avoided.
Know How Much Loan You Can Afford
Realtor.com advises the use of an online mortgage calculator that factors in how much the property might be (estimated), your FICO scores (estimated), property taxes, interest, and other factors to determine a possible monthly mortgage payment amount. Knowing how much you can afford before you start house hunting? A major time saver.
Know The Right Loan For You
Did you find a house that was exactly what you wanted but didn’t appear “perfect” due to age, needed repairs, etc.? A home that cannot pass an appraisal (meaning it means building code requirements and lender standards alike) is not right for certain home loans, and perfect for others.
For example, if you found a house that could be viewed as a fixer-upper, there are rehab loans that let you buy and renovate a home to bring it up to code.
A good example of this type of home loan is the FHA 203(k) Rehabilitation Mortgage. Again, unlike an “ordinary” mortgage loan, the rehab loan does not require the house to be code compliant when you buy it, but it will be required once the repair work is done.
Know The Right Area To Live In
Researching the neighborhood of your new home is one of the most important things you can do. How far away is the nearest major highway? Will the noise or light coming from a nearby shopping center interfere with the enjoyment of your home?
And very importantly, how high are the property taxes?
And what about what you can’t see in the area? Are there big development and construction projects planned nearby? How will they affect your potential new neighborhood?
These are all questions that deserve answers. A home is a major investment, and you deserve to make the most informed house purchase you can. The last piece of advice you should take to your house hunting experience? Start saving, budgeting, and planning your home loan at least one year in advance for best results.
You may find certain aspects of your new mortgage loan, or even a refinance loan, can be time-consuming. You’ll appreciate the extra time.
Joe Wallace specializes in personal finance, military affairs, and consumer protection topics. Since 1995, his work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and collects unusual vinyl records, which gives him an excuse to write the vinyl blog Turntabling.net.