Buying a home is a huge milestone for any person. Since the price tag for a property starts at $200,000 plus taxes and commissions, you want to make sure you’re buying the right home that you and your family can grow in. Here are seven tips that can help you navigate the real estate market:
Get as Much Down Payment Money as You Can
It’s standard to put 20 percent down on a house, yet many lenders now allow much less. In fact, a lot of first-time home purchase programs now offer as little as three percent down payment. While this seems inviting and an advantage too good to pass on, putting 20 percent or less as down payment means you pay monthly premiums for a longer period of time and that you might need private mortgage insurance.
Narrow Down Your List of Properties
You have quite a list of options when buying a residential property, ranging from traditional single-family bungalows to doorman-serviced condo units. Each property type has its own advantages and disadvantages thus it’s important to determine which one fits your circumstances well. For instance, you could go for a fixer-upper if you’re a single young professional who is looking to stay in the location temporarily and planning to resell the property in a few years.
Find an Agent
A good real estate agent can lower your costs and get you properties that aren’t even on the listing yet. Real estate agents have access to certain properties that are yet to be posted in public listing sites. When vetting potential agents, talk with their most recent clients and see whether or not those clients were happy with the results of working with the agent.
Pause Any New Financial Activity
When applying for a home loan, your lender will look at your credit score and history. This assessment will help your lender determine your creditworthiness and loan qualification. Check your credit score prior applying for a home loan. If you identify any errors, have them corrected and your score updated by the credit rating agency.
Attend Open Houses
When looking at a property during open houses, look closely at the home’s overall shape and value. Any stains, odors, or damages should be reflected by the seller’s asking price. Ask all the questions you can about the property, such as when it it was built, how many times has it been flooded, how old the door locks are, what type of materials were used, and so on.
Budget for Closing Costs
Aside from down payment, you should also be saving money for closing costs. Depending on the underlying deal, closing costs can generally range between two to five percent of the total loan value.
Don’t Be Afraid to Negotiate
A lot of first-time home buyers feel they are at the mercy of the selling party when negotiating the price of the property. But keep in mind that there is always wiggle room when dealing with big-ticket items, like a house. If you are inexperienced and unfit to negotiate, your real estate agent will be happy to represent you.
Buying a home this year can affect your personal finances for the next 10 to 30 years. Make sure you lock onto a good property by following these seven tips.