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<\/a>What to do before buying a house<\/h2>\n1. Determine if this is the right time to buy<\/h3>\n
You have to be objective and evaluate your situation because you don\u2019t want to get in over your head when there\u2019s no need for that future stress!<\/p>\n
Jeremy Smith<\/a>, a top-selling real estate agent in Austin, Texas<\/a>, with 17 years of experience, says that when mortgage rates are low, loans are inexpensive, and it can be a good time to buy \u2014 but there are always other factors to consider, too:<\/p>\n \u201cYou would have to look at various factors in your life, like job security and advancing in your career.\u201d<\/p>\n It\u2019s fun to imagine all of the features you want in your new house, but as the Rolling Stones said, \u201cYou can\u2019t always get what you want.\u201d<\/p>\n Let\u2019s say a finished walk-out basement and brand-new appliances are among the top things on your list, which is fine and well.<\/p>\n However, you need to consider that these things typically increase the value of the home<\/a> and could price a property outside of your budget range. Creating a list of features you want (and features you really can\u2019t live without) will help your agent find houses that best fit the criteria and help you determine what you can improve after moving in.<\/p>\n After deciding that this is the right time to buy a house and you\u2019ve created your wants list, you must do a little research into the real estate market in the desired area.<\/p>\n This is why an experienced real estate agent will become your new best friend. The agent will be able to explain how the market is doing in terms of home inventory and prices. They\u2019ll be able to walk you through various contingencies, how to handle a situation where there are multiple offers on the house<\/a>, and they\u2019d also be able to tell you if it\u2019s a seller\u2019s market<\/a> or a buyer\u2019s market.<\/p>\n When you\u2019re speaking to an agent about the market, some questions you might want to ask include:<\/p>\n A neighborhood may look good when you drive through it, but to determine if it\u2019s the right one for you, then you need to spend some time in the neighborhood.<\/p>\n Hang out at local coffee shops, the library, the parks, and other places. Chat with the residents and ask their thoughts on what it\u2019s like to live in the neighborhood.<\/p>\n If possible, rent a room or an apartment for a week or two in your neighborhood of choice, so you can experience it night and day, weekday and weekend, before you decide to live there.<\/p>\n Your credit is incredibly important when you\u2019re applying for a loan because it indicates your creditworthiness to lenders and<\/i> plays a big role in how much interest you\u2019ll pay.<\/p>\n We recommend that you check your credit report<\/a> and monitor your score regularly prior to applying for a loan.<\/p>\n If your credit score needs some work, speak with a financial advisor to see how you can boost your score<\/a>.<\/p>\n Heck, the easiest way you can start is to make sure you\u2019re making all of your minimum payments on time!<\/p>\n As a buyer, you\u2019ll be responsible for closing costs that will need to be paid on closing day, so you\u2019ve got to make sure you have enough money saved to do that.<\/p>\n We have a useful closing cost calculator<\/a> that will give you a ballpark idea of how much you need to save.<\/p>\n Not only is buying a house expensive, so is moving into one!<\/p>\n Along with closing costs, you\u2019ll want to have money saved for things like turning on the utilities, hiring a moving company<\/a> (or to rent a moving van if you\u2019re moving on your own<\/a>), buying new furniture, renting a storage unit if needed, and other expenses.<\/p>\n After you\u2019ve weighed up all the possible expenses, it\u2019s time to take a close look at your finances and figure out what you can comfortably afford to spend on a house before you start shopping for one.<\/p>\n You can use our house affordability calculator<\/a> to get an idea of how much house you can afford.<\/p>\n There are several different types of loans<\/a> you could apply for. Do a little bit of research to find out which ones you may qualify for because each loan has different eligibility requirements, and some have additional program fees or expenses.<\/p>\n Loans typically fall into two categories \u2014 conventional, and government-backed loans, such as FHA, VA, and USDA.<\/p>\n Conventional loans are offered by private lending institutions and banks. These loans are not backed or guaranteed by any government agencies. The lowest interest rates are typically offered to buyers who have a 20% down payment and excellent credit (740 and above<\/a>).<\/p>\n Government-backed loans<\/a> include FHA loans, USDA loans, and VA loans. Although each of these loans have slightly different terms and requirements, they are designed to help make mortgages accessible to more buyers. .<\/p>\n You don\u2019t go with the first lender you pick out of the phone book! Take some time and do some research on a few lenders<\/a>, as some lenders may offer better interest rates, or quicker closing times.<\/p>\n Once you\u2019ve found a lender, now you need to get your preapproval letter<\/a>.<\/p>\n This document will outline how much home you can afford \u2014 sometimes it\u2019s more than your estimated budget, and sometimes it\u2019s less. That said, it\u2019s usually not a good idea to shop at the very top of your budget.<\/p>\n Your real estate agent is going to be your go-to person for everything<\/i> during this process. You need to find an agent<\/a> who has a good reputation, lots of experience, and who makes you feel confident that they\u2019ll work with your best interest at heart.<\/p>\n Now the fun can really begin! Your agent will show you houses that meet your budget and your needs, but you can also ask to see any houses you\u2019ve found on your own that you\u2019re interested in seeing.<\/p>\n People always want to see houses when it\u2019s nice and sunny, but you should be willing to look at houses in different types of weather if at all possible.<\/p>\n For example, if you see a house when it\u2019s rainy, you can look for leaks. If you see a house when it\u2019s cold or snowing, you can check for drafts around the windows, doors, where plumbing enters the house, and air ducts.<\/p>\n It\u2019s important that when you\u2019re going to see a house that the listing details match what you see. Examples of incorrect listings could say there are three bedrooms, but one of the rooms is a glorified closet \u2014 or the listing says stainless steel appliances are included, but all you find when you open the utility closet are outdated appliances that have seen better days.<\/p>\n After you\u2019ve seen a few houses and have gotten a sense for how much your money can buy, it could be time to reconsider what features you are looking for in a house.<\/p>\n Maybe instead of a finished basement, you can settle for a basement that you could finish in the future?<\/p>\n You don\u2019t have to go with whatever insurance company is recommended to you. Shop around and look for homeowner\u2019s insurance companies that offer the best coverage at the best rates.<\/p>\n While you\u2019re looking at homeowner\u2019s insurance options, you will also want to study the FEMA floodplain maps<\/a>. Why? Well, you\u2019ll need to see if you\u2019ll be in a flood zone<\/a> so you can get the appropriate insurance, as well as make sure your house is properly zoned.<\/p>\n If you\u2019re thinking about doing a large renovation<\/a> no matter what, you may want to start the process of requesting permits for the type of renovations<\/a> you\u2019re hoping to do early on.<\/p>\n This isn\u2019t a must-do, but remember: If you drag your feet on permitting until you have the keys in your hand, you could be waiting for weeks<\/i> to get going!<\/p>\n If you\u2019re moving to an area where there\u2019s an HOA (homeowner\u2019s association<\/a>), you\u2019ll need to familiarize yourself with the rules and regulations<\/a> prior to moving in. You don\u2019t want any violation notices because you overlooked one rule or another.<\/p>\n Don\u2019t skip the home inspection<\/a>! The home inspector will go through the property to look for repairs that need to be made<\/a>, structural or foundation issues<\/a>, and more.<\/p>\n Trust us: You don\u2019t want to waive your rights to a home inspection only to discover the roof needs to be replaced or the plumbing in the kitchen floor under the sink is rotting.<\/p>\n There are some instances where you may want to look into getting other types of home inspections.<\/p>\n We have an extensive breakdown of what specialized home inspections<\/a> are available and the circumstances when you\u2019d want to do them.<\/p>\n Your lender will also require a home appraisal<\/a> so they aren\u2019t lending more money than the house is worth. Ultimately, the home appraisal is for your benefit because it\u2019ll protect you from paying more for a house than it\u2019s actually worth.<\/p>\n Title insurance<\/a> protects you and the lender from any possible future ownership claims to the property. This could include filing errors, undisclosed heirs, and forgeries. It\u2019s not required, but it\u2019s a really, really good idea.<\/p>\n After the home inspection is complete, you now have the ability to negotiate with the seller depending on what the inspector found.<\/p>\n You can ask them to lower the price, ask them to repair or fix any problems<\/a>, or request that they give you the money to have the repairs done yourself (also known as a credit).<\/p>\n If you have any<\/i> questions, don\u2019t hesitate to ask them! Your real estate agent will answer your questions<\/a> to the best of their ability.<\/p>\n That advice applies from the time when you\u2019re going on a home tour<\/a> all the way up until closing day \u2014 don\u2019t be afraid to ask! This is a huge purchase, and you want to be 100% certain you know what you\u2019re getting into.<\/p>\n From the time you get your preapproval letter until the keys are in your hands, you do not want to make any big purchases that will affect your credit!<\/p>\n If your credit takes a hit and drops significantly, the lender may see that and change your interest rate, or they could deny your loan<\/a> entirely. Not good.<\/p>\n Clear to close<\/a> means you are one step closer to being an official homeowner. A clear to close means you meet all the conditions and requirements necessary to get to the closing table; all closing documents<\/a> have been signed, and you\u2019ve secured your mortgage. The only thing left is to close!<\/p>\n The final walkthrough<\/a> is your final chance to make sure everything is in order. You\u2019ll get to make sure all of the agreed-upon appliances and fixtures are still in the house. You can double-check the basic functions of the house (lights work, plumbing is good, the HVAC runs properly), and to make sure repairs (if any) have been made.<\/p>\n You can read our full list of things to look for during a final walkthrough<\/a>.<\/p>\n Buying a house is an exciting time, to be sure. In all that excitement, some things may fall through the cracks, and you may not remember what to do before you get down to the business of actually buying the house.<\/p>\n If you\u2019re worried that you will<\/i> forget something, refer back to our guide along the way. You\u2019d be surprised by how much having a comprehensive list can help ease the stress that can come with the house buying process!<\/p>\n Header Image Source: (Daniel Bosse \/ Unsplash)<\/em><\/p>\n","protected":false},"excerpt":{"rendered":" It\u2019s easy to forget what to do before buying a house, but we\u2019ve created a huge list of commonly forgotten tasks in an effort to help you to be well prepared!<\/p>\n","protected":false},"author":230,"featured_media":21380,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"cybocfi_hide_featured_image":"","footnotes":""},"categories":[192,621,620],"tags":[],"class_list":["post-21354","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-for-buyers","category-home-buyer","category-buy-house"],"acf":[],"yoast_head":"\n2. Create a list of what you want in a house<\/h3>\n
3. Research the market<\/h3>\n
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4. Spend some time in your desired neighborhoods<\/h3>\n
5. Check your credit score<\/h3>\n
6. Consider seeking help to repair credit, if necessary<\/h3>\n
7. Estimate how much money you need for closing costs<\/h3>\n
8. Get estimates associated with moving into a new house<\/h3>\n
9. Figure out your shopping budget<\/h3>\n
10. Weigh your options regarding loan type<\/h3>\n
Conventional<\/h4>\n
Government-backed loans<\/h4>\n
11. Compare lenders to find the best fit<\/h3>\n
12. Get preapproved for a mortgage<\/h3>\n
13. Find a real estate agent<\/h3>\n
14. Start the house hunt<\/a><\/h3>\n
15. Tour houses in different types of weather<\/h3>\n
16. Make sure listing details are correct<\/h3>\n
17. Be open to reconsidering your wants and needs<\/h3>\n
18. Research homeowner\u2019s insurance options<\/h3>\n
19. Study the FEMA floodplain maps for your neighborhood<\/h3>\n
20. Request permits for any large home renovations<\/h3>\n
21. Review HOA rules and regulations, if applicable<\/h3>\n
22. Get a home inspection<\/h3>\n
23. Determine whether you need specialized home inspections<\/h3>\n
24. Get a home appraisal<\/h3>\n
25. Buy title insurance<\/h3>\n
26. Negotiate repair requests or credits<\/h3>\n
27. Ask any questions you may have<\/h3>\n
28. Don\u2019t ding your credit<\/h3>\n
29. Get the clear to close<\/h3>\n
30. Schedule a final walkthrough<\/h3>\n
<\/a>Don\u2019t forget what to do before buying a house!<\/h2>\n