When you prepare to buy a home, you should begin by looking at your situation instead of jumping right into looking at available homes. It is a good idea to write down the needs your new home must meet, as well as the other amenities you would like to include, if they are within your means. It is important to separate actual needs from desires. Sacrificing necessary square footage to include a hot tub might seem like a good idea when you're thinking about buying a home, but when your home feels crowded or cluttered later, it might not seem like such a good trade off.
Next on your list is learning more about different types of mortgages. A variable rate mortgage that initially promises a low interest rate may sound tempting. However, as interest rates rise and your monthly payments suddenly increase, you may realize that a variable rate was not the best option for you. Your lender may not be the best person to ask for advice, since he or she is in the business of making a profit. You may want to speak to an accountant or a financial advisor, or conduct a good amount of research before choosing a mortgage structure.
Other issues you must review carefully as you prepare to buy a home are your credit and your ability to secure financing. Getting pre-approved for a home loan is a wise idea. Then, if you decide to make an offer, you need not worry about the frustration and embarrassment of having your offer fall through because your loan application is declined. Knowing you are approved and how much money you can secure will assist you greatly when selecting a home and making an offer.
Your income is also an important consideration. A commonly used guideline suggests that your shelter expenses, your monthly mortgage payment and homeowners’ insurance, should not exceed 25% of your take home pay for the month. This is a reasonable amount for many people, but may vary by circumstances. Several real estate and finance websites offer charts to help you get a good idea of what a realistic monthly payment would be for your situation. Staying within these guidelines should help you avoid purchasing a home that you really cannot afford.
You may be very excited as you prepare to buy a home, especially if you are a first time homeowner. Try not to fall in love with a house or make an emotional decision. Buying a home should be handled like any other important business transaction. That doesn’t mean you cannot enjoy the experience, but it means you need to proceed with caution. Insisting on a professional home inspection before purchasing a home is imperative.
While it may cost a few hundred dollars and slow down the process, having a professional home inspection may save you countless hours and thousands of dollars in the long run. Hire a reputable inspector and make sure he or she gives you a written assessment that includes the foundation, supports, possible damage from pests, termites, leaks, and plumbing and wiring. The roof should also be inspected, as should anything else that appears questionable.
Nothing will put a damper on your excitement over your new home faster than finding you paid top dollar for a house that is not structurally sound or otherwise needs extensive repair. A home that appears beautiful to the untrained eye may have lots of hidden secrets. Perhaps the best advice as you prepare to buy a home is to take your time so you can make sure you get the most for your money.
