5 Smart Moves for Home Buyers

Norhill Realty June 22, 2012

Buying a home is a big decision and you shouldn’t take it lightly.  Check these boxes to make sure you are prepared.

Set a Budget

Starting your home search with a solid budget in mind should keep your search productive.  It doesn’t make sense to look at homes that are well above your monthly payment comfort zone.  Your lender should be able to help you determine the estimated monthly mortgage payment, but don’t forget about property taxes, insurance, utilities and maintenance.Calculator4

 

Save for a Down Payment

Most conventional loan programs will allow for a minimum down payment of 5% for buyers with good credit.  FHA loans will even go as low as 3.5%.  For some home buyers, saving up for a more substantial down payment makes sense.  This will lower your monthly payment and may help you avoid paying mortgage insurance.  Be sure to talk to your lender about loan program details.

Weigh Wants vs Needs

Most buyers want the best location with all of the latest finishes and amenities, but you need to think about what you really need in a new home.  Start with location, then floor plan, then finishes.  Most home buyers will have to make a few sacrifices to find a good home within their budget.  You can’t change the location, changing a floor plan can but done but is typically costly, but finishes can be updated fairly easily.

Get Pre-approved

You shouldn’t get serious about starting a home search without going thru the pre-approval process with a lender.  They will take a look at your credit score, income, debts, and assets.  Your lender should also be able to help you set your budget.  Most home sellers will not respond to an offer without seeing a pre-approval letter from the buyer’s lender.

Research

Talk to your Realtor to get information on the neighborhoods that you are considering.  If you have some time before you are ready to buy, you might want to ask your Realtor to setup a custom search so that you can monitor the listings and get a better feel for the market.  This knowledge will give you an edge when it comes time to negotiate on a purchase.

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