When it comes to buying a new home, you can never be too prepared. It’s likely to be the single biggest purchase you’ll ever make, after all, which means that you need to get it right.
Covering everything you need to know about buying a home would be almost impossible in just one post, so I’ve put together some of the most important, and sometimes overlooked things that you need to know:
You Should Take Your Time
Buying a home is such a big decision, so it’s a shame that so many buyers feel rushed to make a decision, not only about the home they will purchase but also about mortgage deals and property insurance. It’s easy to get swept away, but you should remember that you have time and you don’t need to jump in feet first. Sit back, think carefully and ensure that you make the right choice for you and your family.
You Need to Get Your Finances in Order
Many people assume that as long as they have a well-paying job, they will be a shoo-in for a mortgage, but that isn’t necessarily so. In order to be approved for a home loan, you will also need to have an excellent credit score, and a decent deposit, which means, before you buy, you should make a real effort to reign in your spending, pay down your debts and improve your credit score. This is one of the most important things you must do before buying a new home.
Fixer Uppers Aren’t Always a Good Deal
It can be tempting to buy a fixer upper that is cheap enough to enable you to live in the neighborhood of your dreams, but it might not be such a good idea after all. You see, many fixer uppers can suck you in and turn into a money black hole, sucking every less cent out of your account. If you simply must live in that one neighborhood, at least check that the fixer upper’s foundations, walls, roof, and wiring are all in pretty good condition, and don’t check this yourself, get a professional in to do a thorough inspection!
Get to Grips with Escrow
Although most people know what a mortgage is, a lot of people are unsure about the escrow process, but it’s such an important part of buying a house that you really should know exactly what it is and what it entails before buying. You can find a detailed explanation of it by reading Escrow Process – Understanding from Earnest Money Through Closing, but in basic terms, escrow is an account where a deposit will be safely held until completion. There are a number of controversial issues surrounding escrow, so I really recommend you read the article above before you get to that stage.
Buy a Smaller House Than You Can Afford
You might want to buy the biggest house you can afford, but buying a smaller property and keeping a 10 percent buffer is more sensible because should you lose your job or experience financial difficulties of any kind, you’ll be in a better position to keep up your payments and keep your home.