Here are a few things to add to your toolkit when buying a home!
- Check Out the HOA!
Ask for the home owners association or condominium packet before you make a decision: For example, check to find out if the home can be rented or not if you think you might want to rent it out at some point in future.
- Don’t Buy the Perfect (but More Expensive) House.
If you spend more money on a “better” house, then you will quickly get used to it and will be no happier than if you had bought an “average” house.
- Coddle Your Credit.
Don’t move any money around or apply for credit for 3-6 months before applying for a loan pre-approval. Credit checks and big financial changes scare lenders.
- Get Pre-Approved for a Mortgage.
There’s a big difference between a being pre-qualified and being pre-approved for a mortgage. Almost anybody can get pre-qualified. Getting pre-approved means a lender has looked at all of your financial information and they’ve let you know how much they will lend you. This makes your offer much more attractive to sellers, and may mean you can snag the home with a lower offer than other pre-qualified buyers.
- Learn About the Schools
Even if you don’t have kids, research the local schools because it absolutely affects the value of your home. The value of a home can be affected by as much as 20%, even in the same town, if the home is in a good school district versus bad school district.
- Make Your Offer Stand Out
More than half of the home sales (52 percent) in 2017 are expected to be to first-time buyers, and mostly to the millennial set (19 to 34 years old), research by the National Association of Realtors shows. If you have a home to sell before you can close a contract, think about what you can offer the seller to make your deal more attractive than a buyer who is “move-in ready”. Sometimes making your offer an odd number can help it stand out because the seller will think you put a lot of thought into it! It might also be better to consider new construction, where the builder might be a bit more flexible on timing.
- Be a Flexible First Time Buyer
If you are a first time buyer, make the most of the opportunity. Have your buyer’s agent call the seller’s agent to find out if you can make your offer more attractive by delaying or speeding up closing, or by offering the seller a rent back.
- Check the FEMA Flood Zone Maps
FEMA flood-map changes are aggressively expanding flood zones, especially along the East Coast and Gulf Coast, but also in Loudoun county around streams and rivers, forcing hundreds of thousands of homeowners to buy flood insurance for the first time and others to pay thousands more annually. Check the local floodplain maps at: https://msc.fema.gov/portal
- Re-Think Your Finances
Think you need to put 20% down. You don’t. It is possible to get a mortgage with less than 5% down. The average down payment in 2016 was 11%. You will probably have to get private mortgage insurance unless you can qualify for a government backed loan.
- Check Out Utility Costs
Don’t get caught out with utility deposits – call the utility companies and find out if they need 3 month’s estimated payments as a security deposit – it can happen!
Looking for more tips to help you get ready to purchase your new home? Make sure to talk a look at our post More on Mortgages: How to Avoid Losing Your Loan Approval.
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