10 Things to Consider Before Buying a House This Year

10 Things to Consider Before Buying a House This Year

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Most people want to celebrate life’s greatest milestones in a house they own, but moving into that house is easier said than done. Unlike a weekend shopping spree, you’ll have to plan months in advance before calling a moving company. This guide explains 10 things to consider before buying a house this year so you can purchase the best home for your needs without financial or personal strain.

1. Trust Your Realtor

Realtors can make the home buying process easy or difficult. It depends on if you have a great personal connection and if they know the area. Talk with your loved ones to see if they worked with a realtor who made everything easier for them. If they don’t know one, read reviews for local realtors online. You’ll have a much better experience if your realtor is an expert at what they do.

2. Know Your Financial Limits

Moving into a house will change your monthly bills. You’ll need to adjust your budget to decide which home is the right size for what you can afford. You’ll have to pay your monthly mortgage payment in addition to possible bills like:

  • Mortgage insurance
  • A more costly electric bill
  • Homeowners Association (HOA) fees

A bigger living space means you’ll use more electricity and a possible neighborhood with an HOA board. If your budget can’t handle the additional monthly fees, you may need to put your home buying plans on pause for now.

3. Prepare Your Down Payment

Your down payment determines which houses are within your price range and if sellers will choose you from the field of prospective buyers. It’s the money that locks in your mortgage and begins your financial investment in the property.

The standard down payment typically hovers around 20% of the purchase price, but don’t worry if you can’t save that money before you need to move. Many lenders allow for a 3-6% downpayment. Smaller down payments result in higher interest rates and a monthly mortgage insurance payment, so compare estimates to find something within your budget.

4. Community Amenities Affect Property Prices

Location affects the price of a home in more ways than one. The size of the city and local demand for home sales can make properties more or less expensive. Community amenities and public services will do the same thing.

Looking for a new home near a public playground or park could boost home values by 8-20% because they improve the neighborhood’s quality of life. A highly-rated public school zone will also contain more expensive homes than a neighborhood outside of the zone. Your realtor can explain the best areas to buy a home that will have a significant return on investment (ROI) based on community features if you’re looking to sell within a few years of moving in.

5. Think About Your Life Plans

Most new homeowners plan to live in their house long-term. The property should have everything you need for your life goals. Will you need a spare bedroom to make room for your expanding family? Are you opening a small business and need office space? Will you retire in that home? Ask yourself and your potential partner questions about what you want for your lives. The best house will have room for all of your plans.

6. Compare Mortgage Lenders

Even if you’ve been with the same bank for most of your life, they may not provide the best mortgage options for your needs. Compare lenders by asking for similar loans and requesting crucial information. You should inquire about fine details like:

  • Rate types (fixed or adjustable)
  • Rate lock period
  • Minimum down payment amount

You may be more interested in a flexible interest rate or a long-term loan with the lowest interest rate possible. It depends on details like how long you plan to live in the home and your current financial situation.

7. Save for Extra Expenses

Additional expenses are some important things to consider before buying a house this year. Your down payment won’t be your only financial concern. You’ll also need to pay for a home inspection before putting down an offer. Additionally, you may have to cover other standard costs such as:

  • Title fees (for transferring the deed)
  • Escrow fees (upfront property taxes and insurance)
  • Lender fees (for pulling your credit report)

Talk with your realtor about the average costs for these expenses where you plan to buy a home. You can also get more specific information by asking for estimates from your lender and lawyer.

8. Improve Your Credit Score

Higher credit scores get better mortgage rates and bigger loans. It shows lenders that you can reliably pay your bills on time and manage your money. There are a few ways to improve your credit score quickly, like catching up on past-due bills and avoiding opening new accounts. A few points could mean the difference between getting your dream home and settling for something not as great.

9. Schedule Open House Tours

Browsing online listings is important. You should look at every picture to see if you like the many aspects of a possible new home. If you find something you like, schedule an open house tour. The walkthrough may reveal sizing differences or potential repairs that the photos didn’t capture.

10. Get Your Preapproval Letter Early

Many homeowners want to sell their houses quickly. Presenting the preapproval letter for your loan could help them choose your down payment over someone who offers above the asking price. Speed is everything when it comes to the housing market, so prepare for a quick sale by getting a preapproval letter right when you start looking for homes.

Buy the Best House This Year

These are a few things to consider before buying a house this year that could help you purchase a home that lasts a lifetime. Start planning early, think through your options and compare properties to find the best house for your needs.