The home-buying process should begin months before you plan to move into your new residence and is a process that is full of calculated decisions and important considerations. Because you want to make a smart and informed decision about the piece of real estate you will invest money and time into, it is essential that you prepare for the home-buying process. The following are some tips that you can use when you are considering buying your next home. To learn more about single-family homes for sale in your area, contact a real estate agent near you.
Look At Your Budget
The prospect of searching for the home you will buy and live in is an exciting one that you don't want to make solely with your emotions. The home you buy needs to be within your financial means and fit within your household budget now and in the future. Your mortgage payment should not use up all your extra income — you should still be able to save up for a rainy day. And as a homeowner, having a savings fund is very necessary, as you will be financially responsible for the upkeep, maintenance, and repairs your home will need.
Take some time to realistically look at your income and all your expenses for the year. Then, calculate what you have to put toward a mortgage payment. Make sure you leave some each month so you have some "wiggle room" for emergencies that may arise.
Contact a Lender
Once you have your budget, you should contact a lender to get financing arranged so you can start purchasing a new home. A mortgage lender with a mortgage brokerage or your bank can prequalify you for a loan based on your income and credit. Be ready to provide to the mortgage lender proof of your income with paycheck stubs or tax documents, and give them permission to look at your credit report information.
Once you are prequalified, you will have a maximum amount that you can use to search for your home, and your mortgage broker will begin to search for a mortgage program that works for your needs. You might qualify for a VA loan or a loan for first-time homebuyers, depending on your situation. The type of loan you get for your home purchase will determine the interest rate and terms of the loan over its life.
Hire an Inspection
After you have found a home and made an offer to purchase it, you should make sure to have the home inspected by a professional. A home inspection is a great way to learn of any problems or issues the home has that may not be visible to you as you walk through the home. The seller of the home is usually legally obligated to disclose any known problems or issues to you, but there may be a problem the seller is not even aware of yet.
For example, a home inspector may discover the attic rafters have begun to receive moisture damage from a small leak around the roof chimney during their thorough check. A small leak can damage the insulation or dry rot and even cause mold growth upon the attic rafters. The cost of a home inspection can run an average of $315, but can potentially save you thousands of dollars in repairs to damage you may find after you take ownership of the home.
After hiring a professional inspector, you can use the information to reevaluate the purchase price of the home and renegotiate it with the seller, if necessary. You can also ask the seller to make some recommended repairs or updates to remedy any issues found during the inspection.