The most significant purchase and investment that most people will ever make in their lifetime will come when they buy their home. Since buying a home is such a big decision, you will want to make the best purchase option possible. There are five tricks that homebuyers may not be aware of that can help them make a better and more informed purchase decision.
5 Tricks to Home Buying You May Not Know
1. Know All the Costs
One of the biggest challenges that people can have when they purchase a home, particularly for the first time, are all of the costs that go along with it. If you are currently a renter, you likely have the cost of rent and utilities.
When you purchase a home, the total costs of ownership will include property taxes, mortgage payments, private mortgage insurance, and even home association dues. You should also make sure that you are saving and reserving for maintenance and future repair needs. It is wise to create a personal budget with all of these factors built-in to ensure you can comfortably afford to make your monthly payments.
2. Know Your Financing Options
When you are going to purchase a home, it is very likely that you will need to take out a mortgage. When you are looking to purchase a home, there are many different options that you have to consider.
Some of these options include getting an FHA or conventional loan, choosing a fixed or variable interest rate, or choosing a 15 or 30-year amortizing loan. For those that are active or former military members, a great option may be to get a VA loan as they require very little money down. The VA loan limits in Riverside today make them a great option for people buying in real estate markets all over the country.
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3. Mortgage Pre-Approval
Depending on the market conditions that you are buying in, purchasing a home will require you to get pre-approval for a mortgage before a bid is accepted. Any home seller will want to know that you have the financial resources necessary to close on the purchase.
They will likely require that you provide evidence of mortgage pre-approval, which will come in the form of a letter from your mortgage lender. You should start working with a lender a few weeks prior to when you want to start putting in bids. This will give time for them to complete an initial evaluation to give an assessment of what type and level of mortgage you would qualify for.
4. Home Inspection
While the process of getting an appraisal is important, the most valuable report that you can obtain during this process is a home inspection. With a home inspection report, you will be given detail on the overall condition of your home.
The inspector will be able to assess all part of your property including the roof, foundation, walls, appliances, and electrical system to ensure that everything is up to code. They can then give you an estimate of what the costs to make repairs will be. Based on this report, you may be able to negotiate a repair credit with the seller. During an inspection, the inspector will also tell you where key systems are and how you can troubleshoot certain problems.
5. Know the Neighborhood
When you purchase a home, you are buying a new property and also buying into your local neighborhood. Due to this, it is important that you know what the neighborhood is like. Prior to placing a bid on the home, you should visit the neighborhood several times to get a sense of what it is like.
This should include seeing it during the week and on the weekends as well as during times during the day and night. It would also be a good idea to tour the area to see if there are signs of development going on. All of this will give you comfort that you are moving into a good area that fits what you are looking for in a place to live.
If you are going to purchase a home, following these tips and tricks could be very beneficial. By following these tips you could save money and make a more informed purchase decision, which will continue to benefit you for years to come.