17 Best Home Buying Tips

Home Mortgage

Everybody knows that the largest investment you will ever make is for your home. Because of which, we wanted to take a minute to give you “ALL” the best home buying tips we could find.

  1. Ask friends and family members
    • One of the best ways to get an idea of what to look for in a house is by asking all your friends and family members what they like and don’t like with their house. What do they wish that it had? Keep a list of it and see if it’s something that you should be on the look out for.
  2. Make a wish list
    • Don’t let home-buying be too much of an emotional process. Sit down prior to looking online and before going through an open house and write out: all of your needs / requirements, wants and I wish it had’s. That way you can start prioritizing your house search with your local realtor within the budget that you can afford.
  3. Check Credit history
    • Go to www.AnnualCreditReport.com and get a free credit report. You are allowed 3 free credit reports per year, so for now, select only one credit bureau to get your report from. This way, after you have improved your credit in the coming months, you can select one of the two other bureaus and get an updated report.
  4. Increase your credit score
    • Your credit score is what determines how much in interest you will be paying for the life of the mortgage. So if your credit score isn’t where you want it to be, take 6 months to increase your credit score and lower your interest rate.
  5. Set a budget
    • There are a ton of factors that go into how much you can afford when buying a house: Amount down and payment per month. Sit down with a financial adviser to see what is realistic. Then sit down with a mortgage lender to see what you can get pre-approved for.
  6. Start Saving
    • Now that you’ve done a complete credit background check and set a budget of the amount that you want to buy a house for, now is the time to start saving for your down payment. Many times, if your credit isn’t high enough or there are errors on your credit report, you will need some time anyway to get those straightened out. So this creates an opportune time to start saving for a down payment on your house. Traditional mortgages, like the 15 / 30 year mortgage, have a 5% down minimum to qualify. However FHA loans have a 3.5% minimum to qualify. Warning! Not putting 20% down will force you to have private mortgage insurance (unless its a VA Loan) which will increase your monthly payment by at least $100 per month.
  7. Find a local mortgage company
    • Here’s the deal. The best mortgage company is the one that you can talk to face to face and one that has the heart of a teacher. With that said, stay away from national mortgage lenders that don’t have a local branch with an hour of your new home.
  8. Get Pre-Approved for a mortgage
    • Don’t get pre-qualified, get pre-approved. Getting pre-approved for a mortgage means that a lender has gone through all of your financials, let you know much you can afford and how much they will lend you.
  9. Bigger Isn’t Always Better
    • If you buy the largest house in the neighborhood, remember that the value of your home is still subjective to the houses around it. So if your house is $100,000 more than the next house in the neighborhood, it will be hard to get the same price when you go to resell it.
  10. Don’t time the market
    • When is the best time to buy? Well, that can only be done by looking at history, not looking into the future. So don’t try to anticipate the housing market figuring out when the best time to buy is. Buy a house when you find the perfect house that matches what you can afford.
  11. Don’t move your money around
    • Prior to buying your house, don’t make any major purchases or move your money around 6 months prior to buying a house. Mortgage lenders want to see a complete paper trail and that your finances are consistent and reliable.
  12. Research grants and other funding options
    • A First time home buyer program is one way to go, but did you know that there are hundreds of different funding sources out there for homeowners? As your mortgage company for all the options that they know of and your friends and family. Many options had generous income limits and had different options based upon profession (like for teachers, farmers and also for the area of the home).
  13. Get a survey done
    • The last thing you want to do when you purchase a house is to get into a border dispute with your neighbor right after moving in. Get a survey done on the property so that you know exactly what your buying beforehand. Remember, your property taxes are determined by your lot size, so getting a survey done will help in that regard also.
  14.  Have an emergency fund!
    • Unlike renting, home ownership comes with quite a few hidden costs like: property taxes, home insurance, increase in utilities and HOA dues. Also, you will be responsible for all repairs and maintenance. Because of this, its a good rule of thumb to have 3-6 month of monthly expenses in savings… just as an emergency!
  15. Get HOA contract
    • No two home owners association’s are the same, so make sure to get a copy of the contract so that you can read it over. If you are buying a rental house in a neighborhood and the HOA doesn’t allow rentals, it’s better to find that out prior.
  16. Hire a home inspector
    • As stated in the opening sentence, your home will be the biggest purchase you will ever make. Hiring a home inspector will be the second. No joke. A home inspector’s job is to tell you everything that’s wrong with the house in a unbiased opinion. From electrical, leaking roof,  to foundation and mold problems. Hiring a home inspector will be the best money you ever spend.
  17. Spy on the neighborhood
    • One of the most frustrating aspects of renting is your neighbors. And just because your buying a house doesn’t mean that it goes away. So before you spend hundreds of thousands of dollars on a house, spend some time there. Walk through the neighborhood on a Friday or Saturday night. Do the neighbors throw parties? Does one fix Harley Davidson bikes 7am on a Saturday morning? Find out before you sign on the dotted line!

These are our 17 best mortgage tips. Let us know if you have any tips that you would like to add by commenting below.

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