So, you’re thinking about buying your first home? Well, we’ve compiled a few things we think are very important for you to know before jumping in! Here are five things to know before buying a house that I have learned from personal experience.
Important Things To Know Before Buying A House
Let’s be honest, with the current market and artificially suppressed interest rates just about anyone can buy a house, the real question is whether you should. Simply going down to the bank, taking out a loan, and hoping for the best is a recipe for disaster. Here is what you need to know to make sure that you’re ready to take on the joys and burdens of home-ownership. These tips will help you be prepared if this is your first time buying a home.
Figure Out The Costs
First, determine exactly how much your monthly mortgage payment will be. It may seem obvious, but not every home buyer goes in with their eyes open, as the recent mortgage crisis clearly demonstrated. There are several free mortgage calculators available on the internet, which will at least give you a place to start. This is one of the most important tips when it comes to your first time buying a home. I remember when my husband and I went and got pre-approved for a mortgage and we thought ok this is how much we can afford. However, when we looked at the monthly payment on that amount we weren’t really prepared for that and had to lower or price range in response.
Owning a home is expensive, and I don’t mean just the mortgage payment. The minute you open the door you get to start thinking about home improvement, maintenance, and minor disaster management. How much does it cost to pump water out of a flooded crawlspace? How well insulated is the house, and how much will heat or air conditioning cost? Do you have to irrigate your yard?How much does water cost in your area? What does it cost to put up a fence? These are all questions you need to ask yourself.
There is no such thing as a “turn key”.
There will always be things to buy or fix when purchasing a new home. No, you might not have to do a complete renovation job but just bare that in mind when you are looking at houses. Make sure to do your due diligence and look for the odds and end things you might have to purchase right away or fix. For example, appliances, shower rods, appliances, outside trash bins, etc. Not everything you see stays with the house – so make sure to ask!
The closing date can and will more than likely change.
Probably one of the most frustrating things in the process of buying a house is when the closing date is changed, especially if your lease has already ended, or if you have already sold your house. So, when purchasing your home, make sure to give yourself some wiggle room. There is no worse feeling than feeling displaced or scrambling to find a place to crash for a few weeks before your home closes.
You will need fluid cash.
This is one of the most important things to know before buying house. Even if you are able to negotiate the seller paying the closing costs and you already have your down payment – there will still be costs throughout the process. For example, things like home inspections, radon tests, appraisals, and termite inspections all come with a price tag. Make sure you have the fluid cash before jumping in!
Your bank account is your best friend and your worst enemy.
The loan underwriter will go through your finances with a fine tooth comb once you’ve decided on your home. Seriously, if you deposit money that you found lying around your house more than likely the underwriter will ask for an explanation of where the funds came from and to show evidence of how you got it. To be honest, explaining that I sold a few pieces of furniture on craiglist and deposited it into my account was probably one of the hardest things to prove to my underwriter. So, word of advice, when you start looking at houses (not when you put an offer in) keep track of all of your cash deposits, this will just help you later on.
Looking at homes, putting offers on homes, offers being rejected, counter offers, all of these things have an emotional toll. But try to keep the decision of buying a house the most methodical, logical and rational choice you make. It will be tough – so try to take a step back and think “what is the best financial decision for me when buying a house?”
The most important thing is to use every resource available to you to make an informed and cautious decision. Buying a house is a big step and you want to be prepared for your first time buying a home. It is a great investment once you are ready!
I hope these tips on buying a house have given you some insight into things you should know before buying a house! What are some things you think buyers should know before buying a house? Are you ready to buy your first home? What was your experience like? Let us know in the comments below!