What to Consider When Buying a Home
Buying a home is the single largest purchase you will ever make, and thus one of the most important life decisions as well. In the past 10 years we have seen the housing economy rise at a double digit clip year over year, to essentially being wiped out overnight, and now a reemergence yet again. With all of the toxic loans in the past and housing that is safely appreciating more each year, it is time to start considering leaving your rental and buying a home. However, before you rush right out to snatch up a house you want to make sure you have considered all of the things that go along with buying a home.
First thing is first, make sure you are approved for a loan amount, and make sure this loan amount comes with a monthly payment that you can afford. No homeowner or real estate agent is going to want to work with a potential buyer if they haven’t had pre-approval done by a mortgage broker first. Not to mention obtaining a home loan is much easier down the road if you have already processed all of the initial paperwork. Just make sure you don’t let your mortgage company talk you into an amount you can’t afford. Also, have you saved up enough money for a down payment? You will find that loans with less required down payments come with higher interest rates and additional fees, this is to cover the risk of default since you have less skin in the game. I would suggest putting down no less than 20%, and if that isn’t doable then perhaps you should look at less expensive homes or wait a bit longer so you can save more money.
Next, finding a reputable real estate agent can be important as well. Find a local agent who knows the area well and is patient enough to continue searching no matter how long it takes to find your dream home. Agents make a healthy commission off each sale, and the paperwork isn’t all that extensive, so essentially they are getting paid for their time and effort spent on finding you a house. Most even have automated email capability to send you new homes that come on the market based on your search criteria. When I bought my first house I must’ve looked at 50 different houses, over a 3 month period, and in 5 different cities. So don’t be shy about sending them out to do some research on houses for you.
Lastly, don’t forget about all of the additional fees and expense that go along with owning a home. Utility bills like gas and electricity can vary wildly based on your home size and energy consumption. Other bills like cable and internet depend on the package you choose. Then there are additional expenses that people almost never remember like home security plans or garbage pick-up. All of these monthly fees can add up quick, and turn a home that once seemed unaffordable into a veritable money pit.
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Category: Housing, Real Estate
