With home prices 15 percent higher — or more — than they were a year ago, homebuyers need the right strategy. After all, you don’t want to let the right property fall through if you’re on a tight timeline. Fortunately, if you know about the home buying process, you can position yourself for success.
Read on to learn five important tips for buying a home right now!
1. Determine Your Priorities
Do you want to be in the neighborhood with the best school district? Or is being in a walkable area with a livelier nightlife more important? Create a list and prioritize what you need in a new home.
During the home buying process, consider physical attributes, too. For instance, you may need a two-car garage if you love working on cars. Or, for a growing family, you might prioritize three bedrooms over fancy woodworking and sleek appliances.
2. Get Loan Preapproval
When you can tell a real estate agent that you’re already preapproved for a loan, that opens a lot more doors. You’ll need to visit a lender, such as a bank, and they’ll assess your income and debts. They’ll also look at your credit score in determining your loan amount.
If your credit score could be better, invest some time into improving it before you hit the market. A higher one enables a higher loan and lower interest rates!
3. Save for a Down Payment
One of the biggest home buying tips is to save as much as possible for a down payment. Yes, you can put down just 3.5% of a home’s price with an FHA loan. But you’ll have more to pay back a lender, potentially over a 30-year mortgage.
Plus you may have to pay mortgage insurance to lower the risk for the lender. And that notches up your monthly payment. When you view these properties, you can stand out among bidders if you’re willing to put down more cash.
4. Know the Home Buying Fees
Closing costs can be up to five percent of your new home’s purchase price. They’ll include transactional fees with the lender and your agent’s commission. Just be sure to set aside enough money to cover them!
Also, factor in yearly taxes that you’ll need to pay, as well as homeowner’s insurance. You may be able to bundle these with your mortgage to streamline your monthly payment process.
5. Don’t Skip the Inspection
Some homes for sale might indicate that they’ve been pre-inspected. Or you might feel pressure to bypass an inspection to get the house you want. Don’t do it!
Hire a licensed inspector to evaluate the foundation, HVAC, and roof. They’ll also let you know about other potential red flags, like a termite infestation. And if there are too many issues, you could walk away before closing.
Follow These Tips for Buying a Home
When you have these tips for buying a home in your back pocket, you can navigate the process successfully. Save as much as you can for a down payment and get preapproved for a loan. Finally, get an inspection to ensure you’re getting a home without major baggage.
Find more suggestions to land the home of your dreams. Check back for new articles!
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