How do you know if you've found your dream home? Is the property really worth buying, or should you continue to look around?
The home-buying process can be overwhelming and confusing. But to find "the best deal" don't just look at the costs or your mortgage. Consider what will affect the value of the home -- both the selling price and how happy you will be with your home purchase.
These are the factors to consider when buying a house.
The housing market is quite dynamic, and prices can change because of various factors like interest rates, urban development, demand, and the general economic climate.
In a buyer's market, there are many homes that are up for sale, but the demand is low. That means that prices are lower and sellers are more open to negotiation.
In a seller's market, there is a shortage of property. Housing costs are higher because sellers receive multiple offers from interested buyers.
Look at real estate market trends to find out more about the market situation in your desired location. Compare the costs of different properties, and get a feel of how quickly listed homes are sold.
If you are in a seller market, increase your chances of finding an affordable new house by getting your mortgage pre-approved -- it shows you're a serious buyer. Also, hire a good real estate agent who is familiar with the neighborhood and can help you find the best deals.
Most people will take mortgages to purchase a property. This is one of the biggest financial decisions you will make, so it's important to work with experienced mortgage lenders who can help you through the process.
Talk with your mortgage company about the down payment and monthly mortgage payment you can afford. Many lenders will calculate mortgage interest rates according to your credit score, debt-to-income ratio, and the size of the down payment.
Given all these financial factors, they can provide different payment options so you can find one that makes sense for your particular financial situation.
Since a mortgage is a long-term loan, be sure to give your budget wiggle room for other important factors (like expected income) and future expenses such as car payments, insurance premiums, education of your children, etc.
Note that the Federal Housing Administration provides insurance on most mortgages made by any of their approved lenders.
Are you drawn to historic homes with their original brick facade, or do you love the look of modern Scandinavian? This is a matter of preference, but since you're buying your dream home you might as well get the one you really want!
As you look at different homes, be sure to ask about the age: when it was built, and if there have been any renovations since then. While a brand-new property will have fewer structural problems, it will cost more. Older, renovated homes are cheaper upfront, but you may need to spend more on maintenance down the road.
It's critical to do a home inspection so you can see the actual condition of the home. Aside from the exteriors, look at the plumbing, electrical wiring, drainage, signs of wood rot, and other factors.
While homes in poor condition are cheaper than new constructions, you'll have to spend time and money to fix them up before you can move in. Ask industry experts for estimates on the cost of the repairs (for example, replacing all the flooring) so you know exactly how much money you'll shell out.
The location of a property has a big impact on how much the house costs. But don't just look at the prestige, but practical considerations such as:
Consider how much space your family needs. Do you need a stand-alone house with a yard or a small condo or apartment that's easy to clean and maintain? Empty nesters will need much less space than a young couple looking for a starter home to raise their kids.
Aside from the physical size of the lot, you have to look at how the space was efficiently divided into functional living spaces. Look at the number of rooms, and if it will meet all the needs of your family. Aside from bedrooms, you may need a study or craft room, or space for your home office.
The kitchen layout is very important since you'll be spending a lot of time there! Check if you have enough storage for cooking tools and ingredients and if there's enough counter space for meal preparation.
One of the factors that can influence your ability to buy your house today is the seller's willingness to sell the home, and why they want to sell.
Some sellers need to let go of a property right away, because they are moving and need the money to finance their new home, or they want to recover what they invested in the renovations. They are more open to lowering their asking price or closing costs if you are able to expedite the process.
Others are willing to wait it out until they find a buyer who can pay top dollar.
You've gone through all the factors to consider when buying a house now, and you think you finally found one that meets all the important criteria.
Now that you're ready to buy a house, find a trustworthy financial partner who can help you with the mortgage. Ebenezer Mortgage Solutions can give you different loan options and shorten your closing times. Your dream home can now be a reality.