As a prospective home buyer you may fall into the trap of focusing too much on a home’s sale price. What you may not realize are the other considerations that can also have a major impact on you financially, which can make life more difficult after a purchase.
To avoid this problem, consider the effect other factors may have on your buying power. According to MSNBC, paying off outstanding loans and reducing debt before beginning the process of searching for a new home can significantly impact whether you , as a home buyer, can qualify for a loan and what interest rate you will get. For couples, be sure to check both credit scores, and if needed, take steps to increase your credit rating six to twelve months before you start the home search process.
Cost of a home may be more than money
Mortgages themselves commonly involve additional costs many home buyers forget to account for, such as mortgage insurance. As a general rule of thumb, in order to avoid this fee you will need a minimum 20% down payment on the home. On a modest $100k home, that would be $20k and it does not take into account the many other fees associated with a mortgage loan.
Property size, location and condition are also important. These are among the factors which determine property taxes and maintenance expenses for the upkeep of the home. While a home in good condition may have few repair costs at first, any home is a sufficiently large and complex structure that will need general upkeep and with time something will need fixing sooner vs. later.
Focusing too much on price can also cause you to jump on a good deal just because it’s there, without determining whether the home in question suits your current needs, as well as your anticipated needs in the next three to five years. A growing family, for example, may need more space in the near future.
The opposite can also occur if you purchase a home larger than they can really use.
This larger home can feel like a great deal… that is until you factor in the cost of heating/cooling, yard maintenance, and other costs associated with the extended upkeep of your expanded square footage.
Investigation and closing
When looking at home prices, one expert told Bankrate.com that home buyers might want to consider having their agent show them homes within their specified price range but avoid knowing each individual property’s list price. Not knowing the price before seeing a home in person can help you avoid being influenced either for or against a property by the number. This will allow you to more clearly determine the positive or negative attributes of the property based on your specific needs. Once you have narrowed your choices then it would be a better time to look at the numbers.
When it comes time to negotiate and close a deal, don’t fail to take into account the closing costs and the cost of moving into a new home. According to MSNBC, this is one of the top things home buyers fail to budget for in their pre-purchase planning. Moving costs might include purchasing boxes and other supplies, renting a van, hiring movers, buying new furniture, replacing old items and limited repairs to rooms like the kitchen or bathroom. Closing costs cover administrative fees, title searches and in some cases initial homeowners’ association fees or inspection costs.
When you choose the right real estate agent to assist you with your search process, they should also work with you to provide an estimated cost of closing worksheet to help you anticipate the cash needed at closing. A good agent can be invaluable tool that is there to help each step of the way.
Tags: agent, buy, buyer, buyers, carolina, charleston, credit, finance, foreclosure, home, janine, lender, loan, mabe, market, median, mortgage, negotiate, new, price, real, right, sale, sales, short, time, vacation, west ashley
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