Buying a new home can be exciting and terrifying all wrapped into one. The idea of having a place that you own is extraordinary, but all the stress of the lengthy to-do list that comes along with it can be daunting.
Today we’re going to look at seven important facts that every new homebuyer should know so that you can be ahead of the curve.
1. Always Use A Realtor
It can seem like a good idea to not hire a realtor to save money. “Think of buying a house without a realtor as pulling out your own tooth without the help of a dentist,” said Del-co Realty Group. It can be done, however, it’s not the most efficient way to do things.
A realtor will ensure your interests are meet during the buying process. They will be able to help you with understanding home inspections, negotiating prices, and many other parts of the home buying process. Although you will need to pay a realtor for their service, this can save you in the long run from making a bad investment on a home that needs tons of work.
2. Don’t Forget About The Taxes
It’s important to understand how your taxes are going to be paid. Some mortgage lenders will include your taxes within your monthly payments. Others will exclude them, meaning you will have to pay a lump sum tax payment every year. It’s no fun realizing you owe a ton of money when tax season rolls around.
Also as a new homeowner, it’s imperative for you to keep records of your property taxes, interest paid, and points. These will come in handy during tax season and can help you get more deductions.
3. Realize What Will Need To Be Redone Before Buying
Finding your dream house can prove more difficult than you thought. When you’re viewing different houses it’s a good idea to keep in mind the variation in prices when it comes to changing rooms to look the way you want them to.
For example, planning on redoing a kitchen will not only cost money for the new cabinets, counters, and appliances, but you need to consider the cost of labor as well. This is drastically more expensive than the cost of putting on a new shade of paint. If you need to, contact a contractor to give you an estimate on what the renovation would cost before deciding to purchase the home.
4. Settle On A Mortgage That You Can Truly Afford
When you’re buying a house the mortgage company will typically approve you for a higher amount than you should be spending on the home. You need to take into account your projected income, the mortgage market, taxes, and interest rate.
Traditionally it has been recommended that about one-third of your income should be put towards your mortgage. However, these recommendations have decreased down to just over one-fourth of your monthly income. Remember that if you lose your job or have a decrease in your income your mortgage payment will remain the same.
5. Get A Home Inspection
While there is a full disclosure agreement in place in many states that requires the existing homeowner to tell you about potential problems with the home, not all will. Save yourself a headache and a great deal of money later by getting a home inspection done. This will reveal any sort of structural problems the home has before you sign to buy it.
6. Know What Your Loan Entails
The lengthy process of buying a home can drive anyone crazy. It can be hard to be patient when all you want is to move into a new home. However, you need to take the time to read over any loan before you agree to its terms.
Look to see what your mortgage payment is, how much it can fluctuate, and the closing costs. Realize how the size of the monthly payment will affect the length of your loan. Be sure to read all the clauses and fine print before you sign. Ask the lender to take the agreement home and take a few days to read over all the details.
7. Check The Title Is Free And Clear
Any trained realtor should be able to do this for you. If you skipped over our previous advice of hiring a realtor and decided to buy a home on your own, make sure you do a free and clear title search. This will reveal if there is any lien on the property. If you don’t do this a lienholder of the existing owner can come back to you to pay for any expenses they’re owed. If you don’t pay, they have full legal right to seize the property.
As a new homebuyer, you should act on all these seven tips to ensure your home buying process goes smoothly.