Have you been wondering if buying might be better than renting? There are advantages to owning that go beyond the building of equity and the tax deduction; owning your own land and feeling secure that your little castle is truly yours!
How do you know if you’re ready to purchase a home? How much can you comfortably afford? There are a ton of questions when you start to look at buying rather than renting. We can help!
The LaBuda team has put together some tips on getting ready to buy that can give you a feeling of confidence as you go out and begin the process of finding the first home of your very own.
Know your lease. Breaking a rental agreement can be costly. Start watching the real estate market as early as you like, but don’t start a serious search for a new home too early, or you’ll have to add extra rent and perhaps a lost deposit to your down-payment and closing costs.
Evaluate your finances. Talk to your lender and find out what they look for in an ideal home buyer. Pay down credit card debt and car loans. Ask your lender how student loans affect your application for a mortgage. Determine a comfortable mortgage payment for your budget, and don’t forget to factor in taxes (1-1.5% of home price per month) and home insurance.
Become “pre-qualified”. Lenders will take some basic information to give you an idea of a loan amount you might be approved for, if the underwriters agree that you’re a good risk. This gives you a ballpark idea of how much house the lender thinks you can afford. It’s worth noting that only you know what payment is comfortable for your budget.
Learn the market. Read the real estate section of the newspaper and go through the local real estate magazines offered free in grocery stores. Visit neighborhoods to see what you like, find where it feels like home, and attend some open houses. Watch home prices in your choice neighborhoods to see if they are affordable for your budget.
Prioritize. What features are really important to you? What would you like to have but can do without? What are not important at all? Decide what you can’t live without and what features can wait for the next dream house. Be smart and think about the hidden costs of amenities. A pool or she-shed are great extras, but they cost more in monthly energy bills and maintenance, too.
Find a Buyer’s Agent. Remember that the Realtor you meet at an open house represents the seller of that house. If you decide to make an offer, choose another Realtor to be your Buyer’s Agent and have him or her view the home with you before moving forward. It is very important that someone represents your interests in negotiations. (For advice on choosing a Realtor, see our report entitled “How to Choose a Realtor”.)
Be honest with your Realtor. Now that you have done your homework, you have a realistic idea of what you can afford and what you can expect to find in your price range. Give your Realtor all this information and let them look for properties that fit as many of your requirements as possible. Try to whittle down the list to a manageable size and allow the Realtor to set up appointments to tour the homes you have selected. A good Realtor will respond to your needs and preferences and help you find the first home to call your very own!
At any time during this process, please reach out to the LaBuda Team, we’re happy to answer any questions you may have about this exciting time in your life!