Do you want to stop writing rent checks and invest the money in a home of your own? The decision to buy a house is both exciting and a little scary for many people. Here are ten tips on buying a house to get you started on your journey to homeownership.
- Save Down Payment Money
Ideally, buyers put at least 20% down on the purchase price of a house. For many first-time home buyers, 20% may seem like a lot. There are many different types of loans and loan programs that can make coming up with your down payment easier.
FHA loans help first-time home buyers get into a home with less money down upfront. Depending on your credit score, FHA loans require as little as 3.5% down. FHA loans often have higher loan costs, and you must purchase private mortgage insurance. However they can be a great solution for first time homebuyers.
Active military and veterans may qualify for a VA loan. This loan does not usually require a down payment and also waives the requirement for private mortgage insurance.
If you have trouble coming up with any amount for your down payment, there are many state loan programs to help you. You can find a list of programs in your state at DownPaymentResource.com. Many of these programs help with your down payment at little to no interest.
A Homes for Heroes affiliate lending specialist will be able to answer your questions, help you find down payment assistance and find a loan that best fits your financial situation.
2. Loan Pre Approval
Getting pre-approved for a loan is a significant step in the home buying process. By doing so, you can see how much you can afford to spend on the home of your dreams.
The preapproval process details the loan amount and terms from the lender. It is a guarantee from the lender that you will get the loan. In addition to letting you know how much money you can spend on a house, the pre-approval letter convinces the seller that you are a serious buyer when you make an offer. This, in turn, can give you, as the buyer, more power when making an offer on the home you want.
If you’re unsure of how much you can realistically afford, don’t hesitate to call our specialists! We want you working within your budget and to make a wise investment.
3. Budget
Speaking of budgets! Remember that a pre-approval letter does not mean that you must spend that much money on the house. Savvy buyers sit down and calculate how much money is available in their budget to pay for a mortgage, insurance, taxes, and miscellaneous housing expenses. Do you enjoy expensive vacations? Be honest with yourself about how much of your income you want to commit to your house.
4. Delay Extra Purchases
Once you have your pre-approval letter, it is essential that you avoid using credit for any expensive purchases. That is because a potential creditor will run a credit check on you and a large purchase reduces your credit score temporarily. The loan amount and terms are determined using your financial status at the time of the loan. Changes to your credit scores could cause your home loan lender to reconsider and alter the amount of money available to you. So, the best advice is to hold off on making any major purchases until after you buy your home.
5. Computer Research
There are plenty of websites online to start your initial home search, but when you are ready to get serious about your home search, sign up at HomesForHeroes.com. Real estate websites like Realtor.com or Zillow.com are useful tools to find houses and neighborhoods that pique your interest. Once you start working with a Homes for Heroes real estate specialist, you’ll gain access to more specific information about houses in your area. The internet contains a vast amount of information on neighborhoods that make choosing a location an easier decision. And our real estate specialists will be there to help you every step of the way!
6. Explore the Neighborhood
The house that you choose to buy most likely sits in a neighborhood. Buyers often neglect to explore a community before they buy. Do not make this mistake. If an area doesn’t fit with your needs and lifestyle, you probably won’t be happy in the house. Experts recommend visiting the neighborhood on different days and times before making a decision.
When you’re researching neighborhoods, don’t forget to ask your friends and co-workers where they live and if they have any recommendations. Many times, a co-worker might know something about a town, such as having access to an early morning express commuter train, that sparks your interest.
7. Commute
How far are you willing to commute to work each day? An hour commute in the morning feels very different when you’re making that commute after a long day at work. Scope out the public transportation options if you don’t drive and for those inevitable days when the car is at the auto shop. Try out the commute before making an offer if you’re unsure about the practicality of the daily travel.
8. House Showings
Get ready to walk through lots of houses. Buying a home is one of the most critical decisions that you’ll ever make, so you should take the time to look at all of your options. Condo? Townhouse? Single-family house? Take advantage of the opportunity to visit lots of housing options before you make an offer.
It’s a very beneficial idea to take photos, videos, and notes on each house. Many people find that the details of the houses blend, making it hard to remember specific features of a particular structure. A photograph of a fireplace, for example, might remind you of the fantastic family room that you loved in the third house you saw last weekend.
9. Future Fit
Of course, any house that you consider must meet your current requirements. However, a smart purchase also fits your future needs. Walk through your potential dream house and ask yourself some hard questions. Will it work if you have children? What happens if your elderly parent moves in with your family? If you have a double income family, can you still afford the house if one of you stops working?
10. Resale Potential
It’s a fact that you’ll most likely sell your house someday. Keep this point in mind when viewing a potential purchase. As a recent HGTV article noted, “there’s an old adage in real estate that says don’t buy the biggest, best house on the block.” The primary driver of house price is location, so an expensive house on the moderately priced street will not appreciate in value as quickly as an appropriately priced home on the same street. Your realtor can offer valuable information about the resale potential of a house.
While this isn’t an exhaustive “how to buy a house” list, we certainly hope it helps get you started on the right foot! And don’t forget to reach out to our specialists to help you along the way.
I like that you encouraged us to take pictures of the house that we will observe so that it will be easier for us to remember the details. I will definitely do that because I am a person who easily forgets things. There are times that I can ever forget what I am about to say to the person I am talking to. This will help us a lot on our house buying process especially that we plan to check every possible house in the Miami area next month.
This was a great read; after all, there is a lot that you have to look into when buying a house. It is particularly great that the article brings up the importance of budget. After all, you will want to make sure that you work out how much you can spend before you start house hunting.
I haven’t ever bought a home before, so I really appreciate the tips you gave. I didn’t realize that getting pre-approved for a loan was such a big part of starting the home buying process. I’ll definitely keep this in mind since I want to make sure I have the best chance possible of getting a home I’ll love.
Thanks for the tips on making your home buying experience a smooth one. I agree that one of the best things you can do is get a loan pre-approved so you know what your finances and your budget is looking like. Someone recently told me that you should have at least a ten percent down payment to put down.
Thanks for the tip to get a pre-approved loan, as it will help create a budget. My friend is looking for her very first home, as she and her husband wish to have children. I’ll share these tips with her so that she can prepare and find the perfect home for her family.
Glad you found this information to be helpful and thank you for sharing it with your friend! We are always grateful to serve and help those who serve our country! Thank you!
Thank you for these tips. It is also important to choose a right mortgage. You need to determine if you want a fixed or adjustable rate for your mortgage. You also need to decide how long you will be living in your home for, so that you can determine the loan type and term.
I just wanted to thank you for going over these tips when buying a house. I’m glad you said that you should be honest about your income and understand what your budget is. My sister has been thinking of buying a house and it sounds like this could definitely be something worth spending the time to calculate.
Thank you, Taylor! Glad you found this information helpful. Let us know know if Homes for Heroes can assist your sister in her journey of becoming a homeowner!