These are some great, practical tips on buying a home at a young age
Most people know that it takes a lot of preparation to be able to own your own home. It requires planning and research and isn’t something that can be rushed into! To make sure that you are as prepared as possible, check out this post by L Bee and the Money Tree at Financial Best Life. Here are just some of the things you need to get done before even thinking of buying a home:
-Build your wishlist! Know what you’re looking for. Location? Number of bedrooms? Neighborhood? Fenced in backyard? Garage?
-Get pre-qualified/pre-approved for a mortgage, shop around for the best interest rates.
-Include all fees/closing costs in your budget.
-Have all your financial documents together before applying.
So, you think you’re ready to buy a home! You have a steady job, you have a good amount saved for a down payment, and your credit score is good. You might even be ready to apply for mortgage pre-approval or to start looking for a Realtor. However, even if you’re very prepared, there are still some dire mistakes that may sink your prospects. If you want to be sure to be approved for a mortgage, check out this post by Sarah D’Hondt at the Lighter Side of Real Estate Blog for things to avoid:
-Not STAYING pre-approved- do not open any new lines of credit, make any late payments, or use a credit card.
-Dilly-Dallying- if you see a house you love, make an offer!
-Too low an offer
-Asking too much from the seller and nit-picking the inspection report.
Photo Credit: Frank Hebbert
In many cities, rent expenses are growing faster than actual home prices. It’s becoming cheaper to own than to rent, and people are realizing it. However, to buy a home, you do need to have some money to your name for a down payment, which is why less people are switching over. But, there are ways to buy a home with a small down payment (or even none at all!) For the pros and cons of buying a home with a smaller down payment, check out this post by Kyle Hiscock at the Rochester Real Estate Blog:
-It lets you buy a home when you have good credit/job history, but no saved money.
-It won’t drain your savings account
-Lack of immediate equity- you’ll need to stay in that home for more than 5 years before moving.
-Mortgage insurance required
-Higher interest rates
Most buyers in the current market will be faced with this situation: either the home you liked online has already been sold, or there are multiple offers on the house you want. In that case, it can be tempting to try to spend all the money you’ve been approved for on your mortgage. However, that’s not a smart move! If your offer is then accepted, you will probably end up being house poor. Check out this post by Steven Sales at Finding Homes In Henderson for the smart way to be a competitive buyer:
-Do not ever lowball a seller. Look for homes below your approval price so you are able to offer ABOVE the asking price.
-Offer to pay closing costs or for repairs
-Consider increasing Earnest Money Deposit
-Be flexible on timing- if the seller wants to sell FAST, be able to accommodate them!
It’s common for curious, prospective home buyers to begin their search online. I’ve done it, I admit; it’s pretty fun to look at virtual home tours and imagine myself in various houses. But, what should you do if you’re actually serious about purchasing that dream home you found online? Call the agent who listed it?
The answer is NO, you should not. Before even beginning your home buying search, you should hire your own Realtor to represent you and your financial interests. The other agent represents the seller, and has no obligation to look out for you! I’m not saying that the seller’s agent will deliberately try to screw you over, but it’s important to have someone on your side who knows the process. For more information, check out this post by Amy Kramer on Active Rain:
I don’t know about you, but I want an advocate for my home purchase (the largest purchase most people make in their lifetime), negotiating and looking out for my best interests.
It is better for a home buyer to have their own representation. And remember, the buyer’s agent commission is almost always paid for by the seller at closing!
So why NOT hire a Realtor to represent you 100% in buying a home?
Photo Credit: Nathan Esguerra
Spring and summer are the hottest home sale months; you’ll be facing intense competition, bidding wars, and will probably be pressured to make decisions quickly without fully considering them. During winter, the market slows down and is more optimal for buyers. Therefore, now is the time to be preparing! Spend the fall season improving your credit, getting in touch with a Realtor, and getting pre-approved for a mortgage. For more reasons why winter is the best time to buy a home, check out this infographic at Chris Burk at Veterans United:
-Motivated sellers: people who put their homes on the market in winter are usually looking to move out fast.
-Lower prices: you’ll be able to get more house for your money
-Less competition among other buyers
-Seasonal perspective on home- is the heating working? Are there any drafts?
Closing on a home is both exciting and stressful. You’re so close to finally owning your dream home (or something close to it), but there’s still a ton of stuff to do. Before you sign that final piece of paperwork, check out this post by Meaghan Agnew at the Trulia blog for a list of everything you need to get done. It’s super helpful and a great way to make sure you’re not more stressed than you need to be on move-in day:
-Book the movers ahead of time
-Call the locksmith and book them as close to your move-in date as possible
-Switch the utilities over; make the calls at least 2 weeks ahead of time
-Hire a baby/pet sitting for moving day
-Clear your schedule for closing: make sure you ask off from work, and let people know you may not be available.
So, you’re 20-something years old, you’ve graduated college, or maybe had a decent job for a few years now, and you’re thinking about buying a home. But, living on your own, paying bills, and possibly paying off student loans isn’t cheap. So how do you start saving for buying a home? There are several ways to cut costs of everyday living to reach your goal. Check out this post by Lauren at L Bee and the Money Tree for tips:
-Look into down payment assistance programs
-Take the time to repair credit and pay off other debts first
-Put 20% for a down payment to avoid private mortgage insurance fees
-Don’t spend all that you’re qualified for!
-Don’t go furniture shopping the day you move in! Take your time and compare prices.