6 Things to Know When Searching For Your Dream Home
After years of awful apartments, rising rents, and lease agreements you barely understood, you’re finally ready to own your home. Congratulations! A home that fits your family’s needs and your budget can be an amazing investment and a place to build a life and make plenty of memories.
Before you rush out and make an offer on the first home that catches your eye, take a look at a few things you’ll want to keep in mind while you search for your dream home.
Work With a Real Estate Professional
Unless you want to call a dozen sellers and schedule a dozen viewings, negotiate back and forth with the other real estate agent, get all the paperwork to the lender, handle the escrow with the title company, and about a million other things that a real estate professional does, find someone who can do this for you. Best of all, they know the industry and the area, so they’ll be able to help you find the best home for you.
Know Your Budget Before You Start
How much is your rent right now? Is that a comfortable amount or do you need a lower monthly payment? Think about how much you have in savings. The mortgage lender is going to want you to have enough to cover a down payment, any closing costs you’ll need to pay, and still have some left over. How much house can you buy without wiping out your savings account or killing your monthly budget? Many lenders have home loans that don’t require a 20 percent down payment, but you will need something in the bank when you’re ready to buy.
Talk to a Lender Before You Start Looking
If you really want to know how much home you can afford, you need to talk to a lender. You can work with several (and it pays to shop around) to get pre-qualified. This is a fairly simple process that looks at your income and debt and lets you know how big of a loan you’d likely qualify for with that lender. Pre-approval is more involved and involves an actual mortgage application. This gives you the amount the lender will likely loan you, the possible interest rate, and other information. When you have a pre-approval letter with your offer, a seller knows you’re a serious buyer who’s ready to go to the closing table.
Consider How Much Space You Can Afford
It’s one thing to dream of the big house in the exclusive gated community. It’s another thing to pay for it. Just because the asking price is at the top end of your pre-approval amount, doesn’t mean it’s a good choice. You’ll need to consider utility costs, maintenance and upkeep costs, and the time and effort that will be required to maintain and take care of the home you’re considering. Your first choice may not be the best one for you. Keep looking until you find the one that works for your budget and your lifestyle.
Always Get a Home Inspection
A home inspection can give you much needed information about how well-maintained the home is and what kind of problems you can expect in the first few years after you buy. Problems found by an inspector can either be used to negotiate your contract for a better price with the seller or give you the option to walk away from a bad property. Don’t skip this step even with an as-is property. You need to have as much information as possible to make the best decision.
Shop Around for Homeowner’s Insurance
Your mortgage lender isn’t going to let you go to the closing table until you have a homeowner’s insurance policy selected and ready to go. When you’re looking, ask for quotes that offer replacement cost value – not market value – of your property. This is important because if your home is destroyed, you want a policy that will cover the full replacement – not the market value which may go up or down over time.
Buying your dream home may be the largest financial investment you ever make. Make sure you protect that investment with the best information, help, and insurance coverage available. If you’re in the market for a new home and need a quote for a new homeowner’s insurance policy, contact us at Click Insurance today!