Psyched about buying your first home or adding one more to your stack of real estate assets? There are unique considerations you can't skip if you want the best value for your money.
Sure, it's a huge feat to buy a beautiful house but nothing great comes out of doing things in a hurry. You need a clear head and a definitive action plan to avoid making a compulsive decision that could stress you out or worse, lead to a potential lifelong sea of regrets. To keep yourself safe from worries, here are four real estate tips you should consider to make this process simple and streamlined.
Financial Assessment and Mortgage Pre-Approval
You'll need money. Lots of it. Check your disposable savings. Do you think you'll have enough? What's your income like? What expenses or outstanding debt are you currently repaying? Would you have extra for ongoing house expenses like the utilities, maintenance and repair? Would you need assistance from a lender? What is your credit score? The answer to these questions will help you decide if you're making the right financial decision.
As a general financial rule, you’re in the clear if you can afford up to 20% of the home value. Your debt should be less than 36% of your income with mortgage payments not exceeding 28% of what you earn. You'll need to get your documents ready for submission to a bank or lender. If successful, you'll get a notice stating the loan amount you're qualified for on a document called the preapproval letter. Getting this ready will give you an edge in the buying process since sellers can tell you are a serious buyer.
Engage a Professional Real Estate Agent
You can do it all yourself but if you want the process to be relatively stress free, you can hire the services of a professional real estate agent. It'll help give you an idea of what you should really focus on. Plus, it's never a bad idea to have professionals who know their onions about the local market and can negotiate fair prices in your team.
If you haven't picked a home yet, your agent can help you find a suitable home based on your interests, needs, and budget. They also are well connected to other professionals like attorneys and interior decorators that you might need later on.
Market Research
Never settle for less than you truly want. The location of your home matters a lot especially if you plan to resell the home someday. Consider a neighborhood that has your preferred amenities, proximity to schools, the bus station, mall, etc.
You also have to consider property values and taxes to help you narrow down on your search to get your desired homes. Checking market trends like regulatory changes, seasonal housing trends, interest rates and local development of the neighborhood will be beneficial for anticipating future trends.
Understand the Process and Costs
You have to choose a mortgage with interest rates that match your finances. If you have a stable income, you might want to choose a fixed rate mortgage since it only offers a standard rate. Other types like adjustable rate mortgages can have an initially low interest rate but are subject to unpredictability and fluctuation.
There are also additional expenses that come with owning after home buying costs. Property taxes, home insurance costs, maintenance, internet, decoration costs, utilities and groceries are post-closing costs that you should prepare for. It takes real skill to close a fair deal and finalize the offer. If you have no experience with this, your agent or a knowledgeable friend is your best bet to put you through. Having a knowledge of everything you need to do will help you prepare for deadlines, prevent surprises, and undue delays.
Key Takeaway
In a nutshell, preparation using golden real estate tips is key to a seamless, stress free home purchase. It might be a long procedure in practice but a laid out plan and timelines to meet every payment is essential for a smooth sail. A trusted professional is an added benefit if you're a beginner home buyer. All in all, you have to pay attention to how this might affect your finances in the future. If after all your calculations and assessment, you think you can take on this new responsibility, go for it! Wishing you the best of luck house hunting!
Resources:
- https://www.foxbusiness.com/features/3-steps-to-simplify-the-home-buying-process
- https://www.investopedia.com/updates/first-time-home-buyer/
- https://realestate.usnews.com/real-estate/articles/how-to-buy-a-house