August 24th, 2019 8:25 AM by Jackie A. Graves
Buying a new home can be both intimidating and exciting,
especially since it’s one of the biggest purchases you’ll make in your life. It
pays, therefore, not to jump in without careful thought and questions. Since
buying a home comes with risks and obstacles all its own, you’ll want to
approach the market prepared. Below are some tips and considerations for when
you’re ready to make the leap.
A common mortgage lasts for 30 years, but that isn’t the only
option you have. Depending on your budget, you may choose among varying
policies that differ by length, down payment, or government assistance. For
instance, the Veterans
Affairs Benefits Administration and Federal Housing Administration offer
loans that come with as little as zero to three percent down payment for
qualifiers. It’s also possible to get shorter mortgages, usually around fifteen
to twenty years. Even if you go with the standard length, though, you can make
a difference on your own by making a higher down payment and reducing the
overall price from the start. You’ll have to consider your budget and other
long-term goals, as well as local programs for home buyers, before deciding.
Though you’ve probably already checked and double-checked your
savings before committing to making a purchase, your credit will also need to
be secure. A good score can be the difference between the home of your dreams
and no home at all, as well as whether you have access to a mortgage loan and
its rates. Check your credit before you get too far into the process, and
handle any errors or disputes on your account. You’ll also not want any
surprises, so avoid opening new accounts until you’re secure in your finances.
A home warranty might seem like an unnecessary added cost, but
the right one can save you a great deal of trouble. Home warranties are not the
same as home insurance, which covers just the physical structure of the house,
so your appliances and major systems might need the extra protection. While
they aren’t required, home warranties tend to be inexpensive and come in handy
when you aren’t sure you can cover repair or losses for those fixtures. Not all
warranty plans are the same, though, so shop around as you deliberate.
Once you’re in your home, will you have enough to cover closing
costs? What about needing to furnish the place? The former can run between two
and five percent of the loan, and whether you plan to live in this house for
the length of the mortgage (and beyond) or not, the full cost can vary. Some
fees are negotiable, if not defrayable by the lender. As for furnishing costs,
don’t forget that the home might need fixes, improvements, or simply new pieces
of furniture for your comfort. Be sure to budget carefully for these in the
event the prices fluctuate.
Where the house is can matter a lot more than
you might expect. Besides the common concerns over crime and safety
rates, you’ll want to know about the traffic, nearby amenities, and helpful
business to determine if the area’s a good fit. You should also check out the
schools and exact neighborhood itself, as these can have an impact not only on
price but on later home value. Depending on what your needs and future plans
are, you’ll want to mind your options.
No matter where your chosen home is, this purchase is no small
deal. It'll affect your life for years to come, so picking well matters. Make a
more informed decision with the tips above, and you'll be closer to having the
right place at the right price.
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