Buying a new house is very different from buying a house that was previously owned. You can get the most out of your money by following these tips:
Keep your money where it is
You should not make big purchases or move your money right before buying a new home. This will create big changes in your credit profile and the lender needs to see your reliability. You can prove that you are reliable by providing a complete paper trail if you want to get the best possible loan.
Opening new credit cards and amassing too much debt will make it that much harder to acquire a loan for buying a new house.
There is a big difference between being pre-approved and pre-qualified. Anyone can be pre-qualified but pre-approval means that the lender looked at your finances and told you how much house you can afford.
Pre-approval saves you a lot of energy and time so that you do not spend your time looking at houses that you cannot afford. Moreover, it allows you to shop for the best interest rates and house deals.
Do not time the market
If you keep waiting for the right time to buy, you will never buy a house. You cannot anticipate the housing market because it is unpredictable. The best time to buy is when you find the best house and can afford to buy it. Real estate goes up and down; therefore, waiting for the right time is not a good idea.
Avoid sleeper costs
The difference between home ownership and renting is the sleeper costs. Many homeowners just focus on paying their mortgages and forget about other expenses such as homeowner association dues and property taxes. As a new homebuyer, you should also be prepared to pay for maintenance, property tax increases, and repairs.
To avoid sleeper costs, you should budget for them to avoid the risk of losing your house.
Give your house a physical
Just as you would not buy a car without checking it out first, you need to hire a home inspector to look at any house that you consider buying. This will only cost a couple hundred dollars and might end up saving you thousands. The sole responsibility of a home inspector is to give you information that will allow you to decide whether to buy a house or not.
He offers an unbiased 3rd party opinion that even your friends cannot provide. If the home inspector finds any issues with the house, you can use them as a bargaining tool to lower the asking price. It is better to spend a bit of money on an inspector upfront rather than spend thousands later.
Your opening bid needs to be based on two things: what you believe the property is worth and how much you can afford. It should be fair and reasonable enough to avoid offending the seller.
Assess the market at the time and look at the cost of homes in that neighborhood.
The best way to make your opening bid is by sizing up the house on a price-per-square-foot basis. Moreover, you should check whether the neighbors are putting up structures that might detract from the house’s value in future.
Stalk the neighborhood
If you are thinking of buying new condos The Atlantic, you should get the lay of the land during the day and night. You do not want to buy the perfect house in the wrong neighborhood. Drive by the house that you want to buy during the day and at night to see what the neighborhood is like.