Buying a new home is the biggest purchase you’ll ever make in your life.
That’s why you want to take your time and do it right. Otherwise, you could lose a lot of money or end up in debt for a very, very long time.
We’ve put together this guide to walk you through a few things to know when buying a house.
So let’s get started!
- Come up with a Budget
Before you start shopping, you need to put a budget together.
Know what you can afford.
Remember, you’ll want to be able to make a 20% down payment. By coming up with a budget in advance, you’ll know your price range and how long you’ll have to save before you can make the purchase.
If you don’t have a lot of time to move, you can make a smaller down payment. However, if you do this, you’ll end up with higher interest rates, meaning you’ll spend more money in the long run. To be sure you are able to afford your repayments in the long term, use a mortgage amortization calculator. It takes just seconds and you’ll be able to see what you can truly afford. Don’t just take a larger mortgage and higher repayments for your ego, as you’ll regret it.
There are also several other expenses you should be aware of when you’re buying a house. You’ll have to pay the closing costs, which can include things like title and homeowners insurance, appraisal fees, home inspection fees, etc.
Don’t buy a home that’s more expensive than you can afford. It’s always better to spend more time saving than buying something that’ll hurt you financially.
- Check Your Credit Score and Get the Right Financing
Your credit score will impact what loans you qualify for and what interest rates you’ll end up with. If you don’t have a good credit score, lenders may not approve your loans—they may not have confidence you can pay your mortgage back on time.
So take a look at your credit score before you start looking at houses.
If you don’t have a high credit score, you should take some time to improve it. Depending on what state you line in, you’ll want your credit score to be around the 700 mark.
If your credit score is already where it should be, spend some time shopping around for a lender. Find the best rates you can, and get pre-approved before you start shopping.
- Hire a Realtor
While you can buy a new house on your own, it’s not always a good idea. Hiring a realtor can help you save money.
They will know the houses in your area and what they’re worth. This means they can ensure you aren’t paying too much for a home. They’ll also be able to negotiate the price down on your behalf, which can knock several thousand dollars off the cost.
Buying a home involves a lot of paperwork, and if you make a mistake filling this out by yourself, you can slow things down or even lose the house. A realtor will handle all the paperwork for you and make sure the sale goes smoothly.
But make sure you hire a realtor who really understands the market in the area you’re moving to. Otherwise, they may not be able to get you the best deals.
- Know What You Want
Now that you have a budget, are pre-approved, and are working with a realtor, you’re ready to start checking out houses.
However, one of the most important things to know when buying your house is what you’re looking for. Start by asking yourself these questions:
- What size home do you need (how many bedrooms, bathrooms, etc.)?
- Does your family plan on growing?
- How long are you going to live in the home?
- What features do you want?
Put together a list of priorities. This will help you sort through houses that won’t work for you or your family and can make the process faster and less overwhelming.
- Walk Through Several Homes
Don’t buy the first home you see. Even if it ends up being the right home for you, spend some time walking through several other houses first. This will ensure you get the home that best fits your needs and at the best price.
Picture yourself living in the homes when you visit them.
Can you imagine this house being your home? If not, you might want to look somewhere else.
But don’t let yourself focus too much on things you don’t like if you can change them later. For example, you can replace ugly carpet and repaint over bad wall colors. You might miss out on a great house if you turn it down because of easy fixes.
- Hire a Home Inspector
Before you buy a home, it’s a good idea to hire a home inspector. Your realtor may be able to recommend reputable inspectors in the area.
Your inspector will check for any potential issues in the home, such as mold, water damage, electrical issues, asbestos, etc. If the previous owners added any renovations to the home, the inspector will also check to make sure these changes are up to code.
If they do find a problem, you may be able to lower the price of the home. Either that or the seller may fix these problems for you before you make the purchase.
- Make an Offer
If the inspection goes well, it’s time to put an offer on the house. Again, your realtor can help you with this step. Once the seller agrees to the offer, all you have to do is finalize the purchase and move in!
Things to Know When Buying a House
If you keep this list of things to know when buying a house on your mind, you’ll be able to find a home that meets your needs and fits into your budget. Want to learn some other helpful home hunting tips?
Make sure you check out the rest of our blog!