Buying a home is an important life decision. Make sure you consider these important tips before you buy:
1. Look at your finances and decide how much you can afford.
Lenders usually use the guideline of your total debt payments should be no more than 36% of your gross income. Here’s how to figure it out: Calculate how much your monthly payments toward debt—that’s things like car payments, credit cards, and student loans. Then divide that amount by your monthly income. Once you have your numbers of debt and income, you can plug them into a home affordability calculator to see how much you can afford.
2. Keep your money where it is.
Try not to make any huge purchases or move your money around for 3-6 months before buying a home. It is not wise to take a chance with your credit score. Lenders will be looking at your credit to see if you are reliable and will need a paper trail to be able to get you the best loan possible. If you make the mistake of opening new credit cards or creating more debt, it could affect your loan.
3. Make sure to physical inspect the home and property for potential fixes and hazards.
You would never buy a car without checking under the hood, right? Of course not! Make sure you hire a home inspector to check out your new house. For as little as $200, you could save thousands in the long run. A home inspector is the only way to get a unbiased third-party opinion and their sole responsibility is to provide you with information so that you can make a decision as to whether or not to buy. If there is a problem found with the home, your realtor can help you use it as a bargaining tool to lower the price.
4. Tour the neighborhood at different hours to get a feel for the local atmosphere.
Drop by the neighborhood during different parts of the day. Make sure the drive is manageable during your commuting hours. Find out how far it is to the nearest grocery store or other places you frequent.
5. If you have children now or might in the future, check out the local schools.
Checking out the schools should be a priority whether you have children or not. Good schools ensure a consistent demand for properties and can affect the value of a property up to 20%. Use websites such as Education and GreatSchools to search the schools in your area. These sites will provide information such as: test scores, demographics, student-to-teacher ratios and more.