Buying a home is the biggest financial decision of your life involving lots of money. Not only do you put forward sizeable amount of money as down payment but also commit to pay the monthly installments to the lender for the next 25-30 years. This makes buying a home a very important transaction in your life. Here are some important tips for home buying to make the exercise smooth and hassle free for you.
- Avoid taking credits when buying a home
Your credit score plays an important role in securing a low rate of mortgage from the lender. Avoid starting a new line of credit when you are about to approach a lender for mortgage loan as your credit score takes a dip with every new credit.
- Have a long term plan in mind
Are you likely to switch jobs in near future? Do you have school going kids? Will your parents live along with you? Answers to these and many other similar questions will dictate whether you should buy a home and if yes, then in what location. Buy a home in a location where resale value of properties is high. This will help you in selling your home in future easily and at a high price.
- Have a checklist in hand when house hunting
Experts say that it is impossible to find a great house in the desired location at the desired price. You have to make compromises here and there to settle for a home that matches your requirements. However, make a checklist of desired features and keep this list with you when visiting homes. This will help you in short listing homes that you can buy.
- Dow payment alone does not mean you are ready
Many first time home buyers think they are ready to buy a home once they have 15-20% of the total value of the property n their bank account. But believe us, there are many more costs associated with home buying that you have to keep in mind before jumping in to buy a home. You may be surprised but closing costs can amount to nearly 3-5% of the total price of the property. You also need to arrange money for home insurance, property taxes, HOA fee, and moving costs before approaching a lender for mortgage loan.
- Get the best mortgage product
It goes without saying that you should try to secure the best possible mortgage loan. Even a few percentage points difference in mortgage loan can make you pay much more for your home in the long run. Do not jump at the first offer of loan from a bank. If possible, hire services of a mortgage broker to get the best possible mortgage that suits your circumstances and requirements.
- Do not buy a home bigger than you need or can afford
Many buyers are lured into buying bigger homes that they require or can afford. Bigger homes are not only more expensive but they also need more money for their maintenance and repairs. Stick to your budget and buy a home that fulfills the requirements of your family. Buying a bigger home proves financially draining as you have to pay higher monthly installments.
- Learn about the neighborhood before buying
No matter how good a home is, you cannot live in isolation. This is why good neighborhood matters so much when searching for a home. Make sure that the crime rates are low and there are all amenities nearby. Also find out the quality of the school district if you have kids need to attend home.