Earlier in the week, I shared 5 must-know tips for anyone looking to buy a home. There’s always more to know, so today I’m dropping even more knowledge in order to make your real estate transaction easy, breezy! Here’s part two:
6. GET PREAPPROVED FOR A LOAN
When you get your finances in order, you are aware of how much you can spend which enables you to find homes within your budget. In order to become a serious buyer, a preapproval puts all this in writing for the seller to see so you can make an offer with confidence. Even if you have your money in order for the sale, this will set you apart from other buyers. You are not only prepared but it is proof of your financial situation which ensures you are able to take on the expenses of purchasing a home.
7. DON’T PAY FOR PRIVATE MORTGAGE INSURANCE (PMI)
Down payments aren’t always necessary depending of the type of real estate transaction, but in most cases it’s a good idea to put down 20% of the asking price. If you do not, you’ll have to pay even more hidden fees like private mortgage insurance (PMI). Because of the hike in price of your monthly mortgage payment (because you put less money down), you will need to acquire insurance so the mortgage company is covered if you are unable to pay for some reason or another. Save yourself the trouble and put down 20% to avoid having to deal with higher monthly payments and even more insurance.
8. BE MINDFUL OF HOMEOWNER’S INSURANCE
Depending on the location of your home, you may have to pay more in homeowner’s insurance. Places that have an increased risk of flood and natural disasters will be more costly so you need to make sure you can afford to have your home covered. Living by the beach may be ideal but have you heard of wind insurance? That’s something you need to account for! Get informed about your home and the factors that might contribute to a higher insurance rate.
9. KEEP YOUR CREDIT SCORE IN CHECK
This is a no brainer. Getting a loan for a home is based on your credibility and having a good credit score is the key to getting approved. Be on top of your scores and make sure there are no errors so you can put your best foot forward. Don’t go on a spontaneous shopping spree or make a big purchase (like buying a new car) because these transactions may affect your score and you want it to be in tip-top shape at least 3 months prior to house hunting.
10. GET A HOME INSPECTION
This might seem like a step that you can skip, but it’s always best to look under the hood of the car before you buy it. Having an inspection will avoid any surprises you had no idea existed. A walk-through and correspondence with the seller is not enough! There are many issues that can be resolved before the sale and you may even be able to lower the asking price because of it!