Are you ready to find the home of your dreams? If so, you’ll want to do the right amount of research to be happy with your purchase. This is likely to be your biggest investment, and the last thing you’ll ever want to have are regrets. It doesn’t matter whether you are looking in the Midwest suburbs, thinking of a Florida condo or a ready to buy house in San Francisco, the top tips for making a real estate transaction of this magnitude are actually the most fundamental.
Set a realistic budget
Consider the amount you can pay each month for your house payment. Getting financially in over your head can cause you too much stress. One way to see quickly how large of a monthly house payment you can afford? Take the amount of money you make each month and subtract your other expenses. Experts agree that, as a rough guide, you shouldn’t pay more than 25 percent of your income on the mortgage. This figure should include your property taxes and insurance.
Save for a down payment
If you want to ensure that mortgage services or a major bank will help to get your cash for the home goes well, it’s a good idea to have a sizable down payment. This is the amount of money you’ll need to pay up front. Many lenders will request you have a certain amount of cash for set aside to secure the property. Studies show that average down payment as of 2016 is 11 percent, and this is a good minimum figure for you to aim for. Remember that the more you put down in the beginning, the less you pay interest on.
Do your research
There are many considerations when buying a new house. Location, size, amenities, older versus newer are all factors. First, find a location suitable to where you work. Don’t forget a county by county assessment of property taxes. Depending on your family situation, looking into school quality rankings in potential living spots may be necessary. Once you’ve nailed down an area, the house particulars come into play, such as your ideal square footage, outdoor space and, of major importance, willingness to renovate.
It’s vital to make a list of the items you want in your home and work with a real estate agent in your area to get these. Finding a professional that will be by your side through this process is crucial to your success.
Prepare for closing costs
You may think the listed price of the home encompasses your total payout. However, this is typically not the case, and in all likelihood, you’ll be responsible for an array of further costs.
One of the biggest expenses often neglected include the closing costs for the home. This amount will typically vary based on the price of the property but will frequently be between 2 and 5 percent of the final agreed upon price. Attorneys fees must be factored in as well.
A common mistake of home buyers is believing that brand-new homes won’t have any issues, say with appliances or water heaters. This may lead buyers to overextend themselves, spending for a house at the very max of their budget. Instead, perhaps as part of an emergency fund, keep unforeseen expenses and repairs in mind as a line item in your financial ledger.
You can find the home of your dreams with strategic effort on your part. Hiring real estate and lending professionals is important, but this is no substitute for financial readiness and understanding costs and potential expenditures. You may be anxious to make a new property yours, but doing it the right way is imperative for optimal results.