Buying a house can be fun, exciting, and a little anxiety-inducing, but knowing the good, bad, and ugly of a home purchase will make you more prepared and if everything does go smoothly, you won’t have anything to worry about. There are some hard truths out there when it comes to buying a house and I want to be honest with my clients. Here are my top eight truths that it’s important you know before buying a house.
#1. You don’t need to max out the amount you’re qualified for.
Just because you are approved up to $400,000 doesn’t mean you need to max out that budget. You may find the perfect house for $300,000 and then you’ll have a lot more room each month in your housing expenses to say for improvements or anything else.
#2. Don’t forget about additional furniture if needed.
If you are moving up, that is moving into a bigger house, don’t forget to account for additional furnishings.
#3. Your monthly mortgage payment will be more than just your principal and interest.
Most homeowners will bundle their homeowner’s insurance, property tax, any mortgage insurance, principal, and entrance into a monthly mortgage payment. This could take a $1400 payment up to $1800 for the additional fees. Don’t forget to count that in.
#4. You may not need a 20% down payment.
There are so many programs and opportunities out there for first-time homebuyers that a 20% down payment is no longer needed. About 30% of all first-time homebuyers put down between 3% and 9%.
#5. Don’t open or close any lines of credit or make large purchases during the process.
All spending should be frozen until you close on your new house. Any changes to your credit history or report can drastically affect your interest rate or even your ability to get the loan at all. Read More; 3 Best mortgage tips for May
#6. Always shop around for the best rates.
Get quotes from at least 3 to 5 different lenders. If they know their competing for your business, the likely bring better offers to the table.
#7. Look at the future of the neighborhood.
Even if you don’t have kids, being in a good school district will add value to the house and make sure you know what’s going on with surrounding properties. Will there be any future development? Playgrounds? Noise annoyances?
#8. If you’ve rented in the past, you are now your own landlord.
There’s no one to call unless you’re going to pay for it to repair leaky faucets, broken fences, or regular home repair and maintenance. It is up to you to either fix it yourself or pay for it.
These aren’t that terrible of realities, but it is important to understand the responsibilities of home ownership, especially if you’ve never owned the property before. If you’re ready to get started or just need some direction towards the next step, give me a call today.