Last week we shared a few things realtors really want you to know about selling and buying homes, and this week we’re going to follow that up with six items for your checklist when buying a house! Here are the factors you want to consider as you begin the home-buying process …
The First of Steps to Buying a House: Check in on Your Finances
We know, we know … this one is a little bit obvious, but there are some factors not everyone knows about when it comes to the financial setup required for optimal home buying! If you’re planning to pay with cash, this doesn’t apply, but loan seekers, listen up!
As you consider if the time is right for you to buy a house, you should think back on any large purchase you’ve made in the past few months. For example, did you just buy a car or are you thinking of buying one soon? Were you planning to finance a bunch of furniture once you find that new house? When you take other large loans out around the same time as a mortgage, it can sometimes negatively impact your payments. This is because it might throw your debt-to-income ratio out of the optimal rage for awesome interest rates on a home.
Another element to note here: Even if you’ve done the math and find you can get a car loan and a great mortgage around the same time, make sure to talk to your lender contact about timing. There have been many a horror story about someone getting preapproved for a great loan, buying a car before the home purchase was finalized and thus, losing the loan parameters/disqualifying for it. You don’t want that!
The Home-Buying Process Starts With Setting a Budget
In addition to that major concern, be aware that the amount your bank is willing to loan you is not your budget. Depending on the state of the market in your country and city, a bank may be willing to lend you a lot more than you can actually afford. Create your customized budget based on the unique factors in your own life, not just the income you’re pulling in and your credit score.
Requirements to Buy a House Include … Getting Preapproved
Once you’ve given thought to your financial situation and established an appropriate budget, be sure to get preapproved! Again, this might feel obvious, but so many excited home buyers forget that it’s important to get that loan amount in writing before you starting searching for your dream home.
And speaking of that …
What to Know Before Buying a House? It Isn’t All About the Money; Define Your ‘Dream House’
We put “dream house” in quotes because honestly, all real estate transactions require a little bit of compromise. Unless you have a completely unlimited budget and plan to build from the ground up, you won’t typically be able to find every single thing on your list. Even in that aforementioned scenario, you might have to compromise on location in order to find enough space!
All of that said, it is so important to come up with your list of favorite features before you start shopping. It will enable your realtor to better do their job, and it will help you manage your expectations while achieving your goals as much as possible. If your partner or a friend or family member is involved in the decision, work together with them to organize things you like into three categories: must haves, features you would really like but might bend on, and anything you are happy to compromise on. Here’s how that might look:
Dedicated laundry room
Would Really Like
Large kitchen island
Happy to Go Without
Envision Potential Changes in the Process of Buying a House
As you work on defining that dream house, give some thought to the future. While you should certainly shop for a home that suits your current needs, it’s a bonus if you can find something that will invite aging in place, whether that entails mobility concerns or the possibility of a growing family.
One of the Final Stages of Home Buying is Having the Home Inspected
When you find a home you’re ready to pull the trigger on, it can be tempting to forego inspection. If you majorly love it, you might be unwilling to let the opportunity go no matter the issues. Not to mention, in busy markets, foregoing inspection can entice a seller to go with your offer.
So, we get that it’s going to happen sometimes, and if your circumstances allow you to take that risk, go for it! But, we would always recommend an inspection. Even if you know you’ll buy the home no matter what, an inspection gives you a heads up about issues that will need to be fixed. In some rare cases, those could include things that could potentially evolve into something dangerous for you and your family, so it’s always good to know and plan!
Now that you know the boxes you need to check when buying a home, let’s find your home in the New South …