Keep these tips in mind as you begin to look for your new home.
You’ve taken the steps necessary to be financially ready to buy a home and have your pre-approval letter in hand. Now that that’s over, you begin the fun part—your home search! But before you begin thinking about granite countertops and outdoor living spaces, think through these tips.
- Consider the resale value. It’s a rare feat for a homeowner to stay in their first home for the full term of the mortgage, so you’ll want to consider how well the home you buy would sell again at a later date. When looking for a home, pay attention to the neighborhood and location. Is it located in a good school district? Is there a freeway running through the back yard? Does the floor plan fit today’s lifestyle? Also check to see how the price compares with homes in the area. While the most expensive home on the block may give you all the bells and whistles you’re looking for, ultimately the price of the homes around it will dictate its resale value.
- Consider your future needs. If you plan on starting a family in the next year or two, you probably don’t want an 800-square-foot bungalow. Or perhaps you’re dreaming of starting a home-based business eventually and will need a separate office space. Whatever your near-future plans may be, make sure the home you purchase will accommodate them. Otherwise, you could end up losing money after paying for additional costs and broker’s commissions when you have to sell.
- Know when to walk away. It’s hard not to become emotionally attached to the dream home you’ve just found. But if the deal isn’t right, it’s important to know your financial limits. You don’t want to over-extend yourself to the point where your dream home becomes a financial nightmare. Be sure you can afford your monthly mortgage payments along with all your other expenses before you start signing papers.
- Have the home inspected. You’re already shelling out quite a bit of your life savings for your mortgage down payment and closing costs. You don’t want to be saddled with unexpected repair expenses right when you move in. The cost of a home inspection is well worth it. An inspection can notify you of any structural, mechanical or safety defects in the home and can estimate the cost of repair. You can then use this information as a bargaining tool with the seller and ask that the repairs either be completed prior to moving in or that the cost of the repairs be taken off the purchase price.
- Don’t make any significant financial changes prior to closing. Don’t switch jobs, buy a new car or make any large purchases while shopping for a new home. Your lender will do a final review of your financial information prior to closing and could either change the terms of your loan or even rescind it.
- Do a final walk-through. You’ve nearly made it through the home-buying process! Before you sign away the next 30 years of your life, do a final walk-through of the property. Make sure any issues that came up from the home inspection have been taken care of and that the home is in good general condition and ready to move in.
Keep these tips in mind to help ensure a smooth home-buying process. And if you’ve sealed the deal, check out these additional tips to help save you money once you’ve moved in to your new home.
This article contains general information. Individual financial situations are unique; please, consult your financial advisor or tax attorney before utilizing any of the information contained in this article.
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