Buying a home is one of the dreams of every American, young and old. It is also a big decision, given that it is among the most significant transactions that many people make in their lives. As such, it may seem not very easy, especially if you are a first-time buyer. And if that sounds like you, this article will erase all the anxiety through the five essential tips on starting the home-buying process.
#1. Start early
Buying a home is a process that takes a lot of planning and finances. It is therefore advisable that you start searching for home early before the time you intend to move. First, you should note the homes you admire in your current neighborhood and identify specific features you want in your new home. An early search also gives you time to read websites like the basis point where you can find useful home-buying information and explore magazines with real estate listings. You should also find out the asking prices for various properties to know the current market.
#2. Hire a real estate agent
Real estate agents are resourceful people when it comes to home buying. And even though the home seller will have an agent, a savvy buyer should not depend on the seller’s agent. Instead, it would help if you enrolled in an agent to work with you throughout the process. An agent working for you will find you the best properties matching your search criteria and the best value without trying to sell to you. Additionally, real estate agents have a wealth of knowledge about home buying, and bargaining with the seller’s agent should not be a problem.
#3. Review your budget and compare mortgage rates
A savvy buyer must have a budget when going on a home-buying spree. However, the budget should not interfere with your plans to buy other things or pay your bills after moving. Therefore, you should take a second look at the amount you wish to spend on a new home and plan how you will take care of other issues.
In addition to reviewing your budget, you should also find out the mortgages available to you, the amount you can get, and the interest rates. The mortgage rates determine how much you pay in the long run. Where possible, you should arrange to pay a high down payment to offset the value of your mortgage and thus the interest.
#4. Get pre-approved
A pre-approval tells you how much financiers can lend you for your home buying project. The value might be pegged on your credit score but may as well vary depending on the loan product type. Therefore, you should consult a mortgage professional and get your initial loan approval questions sorted.
The professional should take you through the types of loans available and any restrictions they may have. For instance, some mortgages have insurance requirements and conditions of the property you can acquire with them. Having a pre-approval letter tells the sellers you approach that you can afford their property.
#5. Determine your needs
Laying out your needs is another thing you should do just before starting the home buying process. This involves choosing a suitable area where you want to live, determining the type of home you want, and specific facilities you would like to have in your home.
Many people consider the weather of the area, the accessibility, and the availability of social amenities when choosing a neighborhood. The type of home may refer to a condominium, duplexes, townhomes, or a single-family home. The kind of home you select may directly affect the facilities and features available. Further, some types of homes may not be available in certain localities. Features and facilities may include the number of rooms and the open parking space, among other things.
Buying a home can be a tedious process but not when you know where to start. Starting the process early and signing up for a professional real estate agent’s services should give an advantage in negotiations and making an informed decision. On the other hand, a pre-approval letter tells the sellers that you can afford your desired home while reviewing mortgage rates helps you minimize interest paid for the property.