Home buying should be an exciting time in your life. The real estate market is constantly overflowing with fantastic properties and as the housing market continues to expand once more, buyers are finding easy access to capital once again in order to get great deals on monthly mortgage payments for their new homes. But there are still many challenges that new buyers face before taking the keys and settling in. Understanding your credit score, possible interest rates and realistic monthly payment expectations is only one piece of the puzzle.
Understand Your Needs and Wants
Many buyers understand their needs, but still, more are unaware of their preferences and must-haves. Similarly, most buyers really need to comb through their expectations in order to develop a sense of what they must have in a home, and what constitutes a nice addition.
If you are completely new to the market, searches through homes in your current area and elsewhere can actively help you develop a good idea of what you are looking for. If you are raising a young family, close proximity to schools should be a high priority. Alternatively, if this is a second home, space for a hot tub, mountain views or even searching for log homes for sale in the countryside might be more your speed.
Take Stock of Your Financial Situation
Being realistic about your finances and budget is a must when taking out a home loan to purchase a new home. Understanding how much you are able to put down upfront and how much you can borrow is essential to putting in an offer. Scoring the cheapest home loan on offer is all about planning, and takes a lot more than simply contacting a handful of banks.
Mortgage rates rely on a number of factors concerning your financial health, like your credit score, current debts, and liquid assets. Likewise, a mortgage is a long-term loan, so minor differences in repayment structure or borrowed amount can add up to thousands in additional money owed in the long run.
Start Early, and Investigate the Area Yourself
Home buying is a long game, especially for first time buyers. In order to really get a sense of the property, it’s best to conduct your own research into the area. As well, viewing homes that you are interested in will help you develop a sense of what to expect in comparison to their photos online. This is true for the area, too; shopping in the local markets and dining in nearby restaurants are a must when evaluating the environment. Ask your realtor for detailed information, but also walk the neighborhood yourself.
Save Early, and Watch What You Spend
When seeking a home loan, it’s important to already have a healthy record of personal finance. Watching your spending for the months leading up to making an offer is critical to demonstrating financial responsibility to lenders and can result in lower rates overall on your mortgage. Included here is research on what kind of mortgage payments and loan term work best with your situation.
Your family might prefer the ease of a fixed rate mortgage (providing a single rate over the life of the loan), or you may want to assume a higher degree of risk for the tradeoff of potentially lower rates over time with an adjustable-rate mortgage. Doing your homework and understanding what type of borrowing benefits your particular circumstances the best is essential in the early stages of home buying.
Consider Home Improvement Projects Along With the Property
Its perfectly normal to envision your perfect kitchen or walk-in closet, and then come up empty while looking for it in real estate listings. If a particular design feature factors into your must-haves, then searching for a dining room space or open floor plan that can accommodate the renovations you have in mind can work equally as well.
When buying a new home, the space is yours to tinker with, so changing the layout of the living room, installing hardwood floors, a revamped master bedroom, or ditching some attic space for cathedral ceilings in the great room is your prerogative. Think about the current features, but also consider whether the space is conducive to the changes you might want to make, too.
Home buying requires a careful search but it is also a fantastic time in your life. Make sure to have all of your ducks in a row in order to really take full advantage of the real estate market and make the property you ultimately move into a welcoming home.