Easiest Guidelines to Follow When Buying a New House
After getting your first stable job and buying a car, it is safe to assume that buying a new house is both a major milestone and one of the most important decisions that you will ever make. This same prospect can also be one of your biggest fears, especially from a financial standpoint. But it does not have to be a stressful and scary experience. With the proper patience, care and research, you can overcome your concerns and turn it into a pleasant, even exciting experience. Here are the easiest guidelines to follow when buying a new house.
Determine What You Can Afford And Stick Within Your Price Range When Buying a New House
This seems like an obvious thing to do, but you have no idea how easy you can get carried away. You might find a house that is over your budget and decide to increase your credit. Or, even worse, choose a house that is a little too spacious for your needs, only to realize that the income taxes alone are spreading your finances too thin.
The important thing to remember is that you are not buying a cellphone or a car. A house is a long-term game; it is there to stay. When it comes to numbers, generally speaking, you should be seeking houses that cost two to three times your annual income. Assuming you have no additional costs, like private school tuition or other debts, payments should represent around 28 % of your monthly gross income.
It is worth noting that these are rough estimates so in order to get a better idea of what exactly you can afford, do not hesitate to seek the help of a financial expert.
Determine Which Mortgage Plan Is Right For Your Situation
The next step is determining how much money you can actually spend without going in the red. The best way to do this is to get prequalified for a mortgage plan. In order to get prequalified, you will have to provide the mortgage banker with some basic financial information. They need to know about possible debts, income, amount of savings and, in some cases, investments.
Afterward, the banker will examine your dossier and tell you how much money the bank can lend you and what price ranges you can afford. The next step is getting pre-approved for credit, which involves a bit more bureaucratic work, like providing W-2 statements, bank statements, and others so the lenders can verify your credit score and financial status.
Once you get approved, find a competent real estate agent and start house hunting. The best real estate agents will adapt to their client’s needs and will provide a plethora of useful, ‘’inside’’ information. This could be about neighborhoods and the ins and outs of the house buying process, as well as having good negotiation skills. Which takes us to the next entry on buying a new house. Buying a new house takes time. Be patient.
Now that you have been approved for a mortgage/credit plan, it is time to look for a house. A real estate agent will analyze your dossier, credit score and how much you can spend and recommend a price range.
It is worth mentioning that this will probably be the longest phase of the house buying process. Ideally, if you do your due diligence and not rush to the first attractive option. You will be touring a lot of houses and talking with a lot of sellers. Since you will be seeing dozens of houses, make sure to take photos, videos and write down anything you consider important to remember. You are not just buying a new house, you are buying a home.
The first thing to consider is the layout of the house. This might not be very important now as a first time home buyer. But neglecting this aspect will come back to haunt you once decide to start a family. Young parents will want their bedroom on the same floor as their children. Once they reach adolescence, they will need some distance. Therefore, if possible, make sure the house has a spare room that you can later convert into a bedroom if needed.
The next step is checking for any stains and unpleasant smells which, more often than not, will be caused by a faulty plumbing system. Even if you do not detect any problems, it is best to do some basic tests just to make sure.
Run every faucet and fixture, analyze the water pressure and determine how long it takes to get hot water. Check the sinks for any cracks. Take a quick look in the basement to see if there are any leaks. Obviously, not everybody is a plumbing expert, so if you want to go in with some prior knowledge, seeking more info on The Plumbing info website could help you a lot.
Other things you can quickly do is testing the electrical system by turning the switches on and off. See if the lights flicker and check if windows and doors work properly. Determine if there is enough parking space for your family and potential visitors. You will discover other things that you will figure out on the go. Once you find a house that you like…
Make an Offer
This is where you will see the benefits of hiring a true professional. The real estate agent will act both as a consultant and a messenger between you and the selling party. Once you draft an offer, your real estate agent will present it to the seller’s agent.
Assuming they accept without making a counteroffer and you reach an agreement, you will then make a good faith deposit and transition into the escrow phase, a 30 day period where the selling party takes the house off the market with the expectation that you will buy it.
Get a Home Inspection
Even if your personal inspection did not reveal any issues, there is no harm in hiring a professional to check the house. Look for any safety and quality issue that the seller omitted to disclose. If the inspector discovers any serious problems, you can retract your offer and deposit. Alternatively, you can go back the talking phase. Have your real estate agent negotiate and convince the seller to cover the costs of any potential repairs.
Assuming the inspector did not discover any serious issues and set a deal with the seller, you can close and do all the necessary paperwork. Congratulations! You have just entered the ranks of proud house owners. Now it is time to move, buy furniture and redecorate the house to your liking. Buying a house can be an intimidating proposition. However, once you get the hang of it, it is easier than it sounds. Make sure to read through this article and you will get all the information that you need.
With an educational background in Engineering Design and growing experience in home improvement and DIY projects, Vince is part of the team behind www.ThePlumbingInfo.com