Important Tips When Shopping For Your New Home
- Consider the condition of the house. Is it in need of any repairs? For peace of mind, have the property inspected by a home inspector of your choice.
- Consider the condition of the neighboring houses/yards. Are they neat and well cared for?
- Take a tour of the neighborhood and also drive by the property during various times of the day so that you will have a better feel for the area.
- Location, location, location. Is the house near schools, shopping centers, parks and other areas that you will frequent?
- Will there be any major changes to the neighborhood in the future such as roads/highways, housing/apartment complexes? You may find it helpful to visit the city planner at the local municipal hall.
- While viewing the property, make a mental note of any external sources of noise such as excessive barking dogs, industrial noise, traffic, etc.
What Not To Do Before Buying A Home
- Don't change jobs. Changing jobs can have disasterous results for some homebuyers, while for others, this move won't affect their chances of qualifying for a loan, especially if their income will increase.
- Don't move money around between accounts or change banks. This includes checking, savings, stocks, mutual funds, money market funds, certificates of deposit and retirement accounts. If there are any large transfers, your lender may require you to provide them with a paper trail of all transactions.
- Do not make any major purchases as this may affect your chances for loan approval. Your lender will consider your "debt-to-income" ratio, the percentage of your gross income before taxes that is spent on debt, when determining your loan limit.
When To Delay Buying A Home
- If you're new to the area, it may be a good idea to delay purchasing a home until you are more familir with the surroundings. When a home purchase is made immediately, most people discover they might have made a better decision if they had waited a few months.
- If your job future is uncertain, it may be best to wait to buy a home. If you have recently graduated college, received a job promotion or transfer, or your current employer is "restructuring", it's best to wait until you get a more accurate picture of your financial future.
- If you are experiencing marital problems it's best to forego buying a home for the time being. Quite frequently, it's thought that the purchase of a home might help resolve some of the problems, but if the home should need to be sold before it appreciates, it can create an additional burden during an already difficult time.
Review Your Credit History
Since most people will need to get a mortgage to buy a house, make sure your credit history is in tip-top shape. A few months before you begin looking for your new home, obtain copies of your credit history. Review the reports to make sure the data is correct and fix any discrepancies before you apply for a pre-approval on your loan.
Research The Sales Trend In The Neighborhood
Before you make an opening bid, you should consider sales of homes in the area during the past few months. If neighboring homes have sold for 5% less than the asking price, your bid should be between 8% and 10% lower than the asking price.
Why School Districts Matter
When looking for your new home, it's wise to consider the school district even if you don't have school-age children. Why? Because if you should ever decide to resell your home, a quality school district is a top priority for most home buyers, which will boost your property value.
Get Pre-Approval On Your Mortgage Loan
Applying for pre-approval will put you on the right path to finding a home you can afford and save time and grief of looking at houses that are above your price range. You're also in the position to make a quick, serious offer on a house should the opportunity arise. Don't confuse pre-approval with pre-qualification, which is only based on a review of your finances. Pre-approval is based on your credit history and actual income and debt.
Hire A Home Inspector
Before you purchase a home, your lender will require a home appraisal to determine if the house is worth the price. In addition, you should separately hire your own home inspector with experience in performing home surveys in the area you are buying. This could save you costly repairs and headaches down the road.