More Tips For Buyers
Help for Homebuyers | Homebuyer Education Programs | More Tips for Buyers | Tips for Sellers |
Ten Rules to Follow When Buying a Home
1 | Stay put. Commit yourself to your new home for at least 4 - 7 years before making your next move. |
| 2 | Money matters. If you're considering a mortgage, shore up your credit and get a copy of your credit report. |
| 3 | Get pre-approved. Save yourself the time and grief of looking at houses you can't afford. |
| 4. | Determine how large your mortgage can be. Explore different loan options to determine the best scenario for you. |
| 5 | Decide what and where you want to buy. Prioritize your needs (location, schools, local amenities, home features). |
| 6 | Consider your resale value even if you don’t think you'll be moving. |
| 7 | Do your homework. Write a contract based on current sales trends of similar homes in the neighborhood. |
| 8 | Calculate the hidden costs. Property taxes, insurance, maintenance, and homeowner association fees can impact your wallet over time. |
| 9 | Don’t be house poor. Double and triple check to be sure you haven't maxed yourself out on the cost of your home and have nothing left for repairs. |
| 10 | Get help. Use a REALTOR® to get the most for your money. It pays to have someone looking out for your interests. |
5 Common Homebuyer Mistakes
1 | They don’t ask enough questions of their lender and end up missing out on the best deal. |
| 2 | They don’t act quickly enough to make a decision and someone else buys the house. |
| 3 | They don’t find the right agent who’s willing to help them through the homebuying process. |
| 4 | They don’t do enough to make their offer look appealing to a seller. |
| 5 | They don’t think about resale before they buy. The average first-time buyer only stays in a home for four years. Will the home you want easily sell without much additional work? |
Get Your Finances in Order
| 1 | Develop a household budget. Instead of creating a budget of what you’d like to spend, use receipts to create a budget that reflects your actual spending habits over the last several months. This approach will factor in unexpected expenses, such as car repairs, as well as predictable costs such as rent, utility bills, and groceries. |
| 2 | Reduce your debt. Lenders generally look for a total debt load of no more than 36 percent of income. This figure includes your mortgage, which typically ranges between 25 and 28 percent of your net household income. So you need to get monthly payments on the rest of your installment debt — car loans, student loans, and revolving balances on credit cards — down to between 8 and 10 percent of your net monthly income. |
| 3 | Look for ways to save. You probably know how much you spend on rent and utilities, but little expenses add up, too. Try writing down everything you spend for one month. You’ll probably spot some great ways to save, whether it’s cutting out that morning trip to Starbucks or eating dinner at home more often. |
| 4 | Increase your income. Now’s the time to ask for a raise! If that’s not an option, you may want to consider taking on a second job to get your income at a level high enough to qualify for the home you want. |
| 5 | Save for a down payment. Designate a certain amount of money each month to put away in your savings account. Although it’s possible to get a mortgage with only 5 percent down, or even less, you can usually get a better rate if you put down a larger percentage of the total purchase. Aim for a 20 percent down payment. |
| 6 | Keep your job. While you don’t need to be in the same job forever to qualify for a home loan, having a job for less than two years may mean you have to pay a higher interest rate. |
| 7 | Establish a good credit history. Get a credit card and make payments by the due date. Do the same for all your other bills, too. Pay off the entire balance promptly. |
What Not to Overlook on a Final Walk-through
It’s guaranteed to be hectic right before closing, but you should always make time for a final walk-through. Your goal is to make sure that your home is in the same condition you expected it would be. Ideally, the sellers already have moved out. This is your last chance to check that appliances are in working condition and that agreed-upon repairs have been made. Here’s a detailed list of what not to overlook for on your final walk-through. Make sure that:
- Repairs you’ve requested have been made. Obtain copies of paid bills and warranties.
- There are no major changes to the property since you last viewed it.
- All items that were included in the sale price — draperies, lighting fixtures, etc. — are still there.
- Screens and storm windows are in place or stored.
- All appliances are operating, such as the dishwasher, washer and dryer, oven, etc.
- Intercom, doorbell, and alarm are operational.
- Hot water heater is working.
- No plants or shrubs have been removed from the yard.
- Heating and air conditioning system is working.
- Garage door opener and other remotes are available.
- Instruction books and warranties on appliances and fixtures are available.
- All personal items of the sellers and all debris have been removed. Check the basement, attic, and every room, closet, and crawlspace.