Assisting You in Your Home Buying Decision

New Home Digest 

Buying a home is likely one of the biggest decisions you will make in life. Choosing where you intend to live, the style of home that is right for you, and your budget are all key factors involved in the home-buying process. Today, there are many tips and tools available for assisting you in your home buying decision, whether you are a first-time homeowner or you are purchasing your tenth property.

Start Saving Early

Even before you begin looking for a new home, it is highly advisable to start saving early. When investing in a home, it’s important to consider all of the costs that will be involved in the process. A down payment, move-in expenses (as well as transportation or shipping), as well as closing costs on your new house, should all be kept in mind before you enter the real estate market. Even if you intend to work with a real estate agent who is assisting you in your home search, having the fees covered ahead of time can help provide a seamless experience.

Moving and Transportation Expenses

If you are thinking of purchasing a home in another town or even in another state, it is imperative to plan for moving and transportation expenses ahead of time. Consider how many pieces of furniture you intend to sell as well as the items you plan to keep and ship or transport to your new destination. You should also consider potential upgrades and repair costs that may be necessary when first moving into a new home.

Down Payment

Saving for a down payment on a home is essential, whether you have experience in real estate or not. Typically, a down payment will range anywhere from 3% to 10%, depending on the size of the mortgage you are applying for as well as the current state of the real estate market. For those who qualify for VA loans, it may be possible to obtain an even lower interest rate with a locked-in mortgage.

Closing Costs

Any time you purchase a residential or commercial property, expect closing costs. Closing costs are all fees that are considered necessary to process and close a mortgage deal. This will range anywhere from 2% to up to 6% of your total mortgage, depending on the size of your loan. If you are in a buyer’s market, you’re in luck. In some cases, sellers will be more than happy in assisting you in your home purchase by covering some or all of the closing costs if you are finalizing your deal in a buyer’s market.

Build Your Credit

One of the most important tools used in assisting you in your home search is your credit score. Without a solid financial track record and credit score, it may be next to impossible to obtain a mortgage loan for the home you desire. Obtain copies of your credit report if possible or use an app that is designed for assisting you in your home buying process by generating credit reports.

Spend time thoroughly reviewing your credit report to determine which accounts you can work towards paying off. Consider applying for a secured credit card if you do not have credit to your name or if you are looking for a way to rebuild or establish credit. Additional tips to keep in mind while you are working towards building your credit include:

  • Always pay your bills on time: Paying bills on time will quickly help to establish and build credit in your name. Missing bills or avoiding them can have a negative impact on your credit within months.
  • Maintain open credit cards: If you have credit cards at this time, keep them open. Having more credit cards available can help you maintain your credit score. Closing a card may lead to a lower score, depending on the card and its existing limit.
  • Keep track of your credit score: Use an app that is designed for assisting you in home searching and purchasing to keep track of your credit score. Take care of hard inquiries or other potential red flags on your score to help rebuild it as quickly as possible. The better your credit score, the easier it will be to obtain a mortgage at an interest rate that is acceptable.

Compare Mortgage Options and Assistance Programs

Whenever you are in the market for a new home, it’s important to consider all of your options–especially when it comes to applying for a mortgage loan. Some of the most popular types of mortgage options available to those who are purchasing a home in the United States include:

  • FHA loans: FHA loans are loans that are permitted and approved by the Federal Housing Administration. These loans are backed by the government and are often available with down payments that begin at as low as 3.5%, depending on the size of the loan and the qualifications of the individual applying.
  • Conventional loans: Conventional loans are provided by financial and banking institutions, and they are not backed by the US government. However, some conventional loans that are suitable for those who are purchasing homes for the very first time may be available for as little as 3% as a down payment in total.
  • VA loans: VA loans are available for those who have served in the military as well as those who are also on active duty. In most cases, VA loans are also permitted to spouses of members of the military who are on duty or have been killed in action. All loans that are approved by the VA are backed by the Department of Veterans Affairs, or the US government.
  • USDA loans: Another option for obtaining a mortgage in the S for farmers and those living in rural areas is to consider a USDA loan. USDA loans are optimal for those who reside in rural areas. In many cases, depending on the individual’s own qualifications, it is possible to obtain a USDA loan with little to no down payment.

Research first-time homebuyer programs that are also available for assisting you in your home buying venture. There are many programs available for first-time homebuyers who qualify for conventional loans, depending on where you live.

Compare Fees and Mortgage Rates

At times, the housing market can be fairly unpredictable. This is why it’s so important to research mortgage rates and compare fees before making any major decision. If you are a first-time home buyer, shopping around is highly recommended. Lenders will provide you with different perks and potential offers that may sound appealing to you at first glance. However, take the time to research each individual offer thoroughly to ensure you are choosing the right one.

Obtain a Preapproval Letter

Once you feel comfortable and confident in your knowledge of the real estate industry as a buyer, you can make the move to obtain a pre-approval letter. A preapproval letter can help to expedite the home-buying process, which can come in handy in a highly competitive and overly-saturated market.

Preapproval letters require a lender to run a credit check while simultaneously assessing financial records and loan eligibility. Once you receive your approval letter, you can utilize it for anywhere between 30 days and 6 months, depending on your loan type. Preapproval letters indicate the seriousness of a buyer, as they are already approved to purchase the house.

Research Home Styles

Once you have a clearer understanding of your credit score and the mortgage you are approved for, you can then begin researching and comparing home styles that you prefer. Whether you are seeking a contemporary home or waterfront homes with a brand- new roofing installation, take time to research home styles before finalizing any decision you make.

Use local and online listing websites to research homes that are for sale near you. Review photos and videos to find home styles that are most captivating and appealing to you. Consider the number of bathrooms and bedrooms you are interested in based on your household size and potential future plans. It is also important to consider whether or not it is important for you to have an open, large, or fenced-in backyard. Create a list of your top priorities once you begin researching and comparing home styles that are most appealing to you and that fall within your budget.

Consider Features and Amenities That Are Important to You

Finding the perfect home is about more than simply choosing the first home that appeals to you visually. Adequate space, modern windows and doors, automated blinds, and even hardwood flooring may all be important features and amenities to you and those in your household. When you are in the market for a new home of any size, it’s important to consider popular features and amenities that are must-haves. This will help you to save time while looking at only listings that meet your most prioritized criteria.

Some features and amenities to keep in mind when entering the housing market might include:

  • Size and space: Consider the overall amount of square footage that is available with each property you look at and are interested in. Will the square footage be adequate for your current living needs as well as any plans you have with your family in the future?
  • Bedrooms: How many bedrooms do you require at a minimum? Is it important for the master bedroom to have a bathroom or an en suite? Where should the bedrooms be located?
  • Bathrooms: Is there a set number of bathrooms you prefer to have in your home? Do you prefer to have access to a private bathroom? How many guest bathrooms do you want in your home?
  • Flooring: What kind of flooring are you interested in? How much maintenance do you want to conduct regularly in your new home (based on its size as well as the flooring the home includes)? Are you thinking of hardwood flooring or carpet throughout?
  • Garage: Do you need a home with an attached garage? How important is a modern and updated garage to you? Are you looking for a home with an attached residential garage door that is easily accessible from the backyard or even from the inside of the home?
  • Yard: How important is the space in your backyard to you? Are you looking for a home that is ideal for entertaining, or do you prefer spending time gardening or grilling? How much space will you need in your back and front yards? Will you be searching for a home with an open yard and additional land, or are you interested in a home with a fenced-in yard?
  • Decorative features: From automated blinds to swimming pools and fireplaces, create a list of decorative features that may help some listings stand out among the rest during your search.

Energy-Saving Options

Another aspect of home-buying today to keep in mind is energy-efficient homes that are designed with energy savings in mind. Eco-friendly homes are ideal in assisting you in your home venture, as they provide energy waste reduction and ultimately, savings on electricity each month. Investing in energy-saving homes with a residential solar panel installation is a great tool for assisting you in your home purchase while saving you money.

If you are interested in energy-saving options when searching for your new home, be sure to consider finding a home that is designed with solar panels and one that also has new home windows that are eco-friendly. Be sure to check the AC installation in any home or property you are interested in to determine if the AC or HVAC setup is up to your standards and preferences.

Researching and preparing ahead of time is the best way to go about finding the perfect home, especially when you are searching for tools that are ideal for assisting you in your home buying venture. With an understanding of the home style you are interested in and the features and amenities that matter to you most, save time while finding a property that is truly right for you.

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