10 THINGS TO CONSIDER BEFORE BUYING A HOME
Here at Guild Mortgage we know that buying a home is one of the biggest decisions in your life. We want to be there with you through the entire process, supporting you the whole way through. We also believe home buyers should be as educated as possible when making this decision. There are 10 things you should consider before buying your home.
Before you even consider buying a home, you should think about whether or not you are in a place you want to be for a while. If you aren’t planning on staying put, or are unsure about your whereabouts over the next couple of years, it might not be the best time to invest in a home. The transactions, fees, inspections, and taxes associated with buying and selling a home are often greater than most anticipate. It really isn’t worth all the hassle, even in a rising market.
This is information you want to know before you even begin your house hunt. You should be aware of the condition of your credit before you fall in love with a home, and later realize your credit won’t support the kind of mortgage you want. Make sure your credit is as clean as possible. Get a report, make sure all of the information is correct, and fix anything that is off.
This is an important step to take before you begin your home search. You want to make sure you know what your budget will be. Visit the lending office and see how much money you are preapproved to spend. You don’t want to fall in love with a home, then try to qualify for a loan, and not meet the requirements for the home. This is any easy way to establish a budget to begin your search in.
You want to make sure, not only that you have a real estate agent that has your best interests at heart, but also that you choose a mortgage lender that does the same. Do your homework and choose the best fit with your situation. Make sure the lender is willing to work with you to educate you on the process and make your payments something you feel comfortable with.
You will usually be given a couple different options when choosing a mortgage. Have your lender work with you to choose the best route. There are traditional mortgage options, reverse mortgage options, HARP loans, etc. For example, sometimes you will have the option to pay an additional amount of money at closing to lower your interest rate. This is a good option if you are planning to stay in the home for a long period of time.
Your lender will help you understand your options, but you should also take into account your own lifestyle. As a general rule, aim for a home that is 2 ½ x your annual salary. You really need to do your homework to figure out if you can afford a home based on your monthly mortgage payments, bills associated with home, and your preferred means you wish to live in.
Make sure you consider the location of your desired home. What will your commute be like? Is it convenient to places you frequent? Is the neighborhood safe? What has the value trend been in your desired neighborhood compared to other neighborhoods? Essentially, you need to be sure the location suits your needs.
We all know good real estate investments take location into account. One piece of that puzzle is the school district. Try to choose a home within a highly desired school district. If you have children, it is obvious why this is important. Even if you don’t have kids, it is important to pay attention to because desired school districts can boost home value. When it comes time to sell your home, this may be an important factor for buyers.
Your opening bid should reflect sales trends of homes in that neighborhood. Find homes that are similar to yours, and see what they sold for versus what the asking price was. If most of the homes in the area sold for 5% under asking, offer 10% under asking to start.
This is usually required before you buy a home anyways, but it is one of the most important things you can do. Hire an inspector privately that you know will do a thorough job of looking over the home before you buy. You need to know if there are any major issues with the home that need to be addressed before you gain ownership.
The information above is not guaranteed to be accurate and does not represent the opinions of Guild Mortgage Company.