6 Things You’ll Wish You Knew Before Buying Your Home
We know that the home buying process is daunting, and it might seem like you have a million tasks on your plate. Everyone is giving you advice, but what should you really spend your time worrying about? We asked a recent first-time homebuyer what she wishes she knew before she bought her home. Here are the 5 pieces of advice she thought were worth sharing.
Take Your Time With Mortgage Lenders
It’s no easy decision when debating over the many home lender options. First-time home buyers typically do the research themselves or use a loan officer, often referred by their real estate agent. Whichever route you decide works best for you, don’t be too hasty. Reading the fine print of every offer you receive is a must.
If you take the time to consider various lenders, you may find yourself in a position to negotiate the terms of your mortgage. A major first-time buyer consideration is that of Private Mortgage Insurance (PMI). If your down payment is less than 20% of the home sale price, then there is a very high chance most lenders will require a monthly PMI fee. By taking the time to shop around, you may have the opportunity to arrange a more favorable long-term agreement.
Pro tip: you can quickly compare different rates and lenders using Bankrate.com
Another type of loan to look out for are loans that recast. This means that your interest rate and loan term remain the same, but your monthly mortgage payment is reduced to reflect your actual current loan balance. Typically with these types of loans, lenders need an additional lump sum payment in order for recasting to work.
Everyone’s situation is unique. There are pros and cons to every loan. We aren’t financial advisors and you should always supplement our advice with a professional.
Consider Your Ideal Location & Lifestyle
Thinking about how the location of your home impacts your life longterm is necessary when you're buying a home.
Do you love the idea of serene privacy and don't mind making the drive into town? Then a home with some acreage would be great for you. If you want to be able to get to where you're going quickly, and don't mind a little bit of that "hustle and bustle" then moving a little closer into Evergreen might be a better idea.
The key here is being realistic about your lifestyle and what is going to work for you longterm. Evergreen is one of those special places where you're surrounded by nature all the time, so it's good to consider what types of activities you'll do the most and keep that in mind while you're house hunting. Think about things like storage, distance to your favorite trails, and a mudroom if needed.
Budget For Unexpected Costs
This may sound obvious, but plenty of buyers do not fully comprehend the amount of money that is spent before getting the keys to their future homes.
While it’s essential to determine your future mortgage allowances, it is equally imperative to save an emergency fund. If your current living situation does not allow a month to month lease agreement or you find the home you can’t live without prior to your planned moving timeline, you will need a financial buffer. More often than not, buyers find themselves stuck between their current living expenses and those of their new mortgage agreement.
Moving costs and the possible use of a storage facility can become very costly even over a relatively short period. Buyers will also be responsible for paying all inspection fees for each home they intend to make an offer on. For direction on how much to set aside for these extra costs, speak with an experienced local real estate agent.
There Is No Such Thing As The “Perfect Home”
According to real estate mogul Barbara Corcoran, “Buyers decide in the first eight seconds of seeing a home if they’re interested in buying it.” While following your gut is important, too often new buyers tend to make rash judgments. Before starting your home search, brainstorm a very detailed list of deal-breakers. Is having acreage a must? Are sweeping mountain views on your list? Are you only interested in homes with updated interior features? Do you require a minimum of 4 bedrooms and 2 bathrooms? Now narrow that list of must-haves down to the most important 3-4 features. This may take some serious flexibility. If you have the time and freedom to look at every available option, do it. We know this sounds daunting, but your earlier expectations may change during the house hunt. Sometimes it’s tough to find the home that has everything you ever dreamed of -- in the ideal price point -- in the perfect area of town.
It might be impossible to find a home that checks off all of the boxes upfront. But as time goes on, you can check the rest of the boxes off.
Always Consider Return On Investment
It’s relatively easy to factor which type of home and location suits your current lifestyle needs. A townhouse or an apartment may offer a cheaper mortgage upfront… it might even within walking distance to your favorite coffee shop or gym! While these are all things to consider, do not lose sight of the long-term investment. If and when you decide to rent or sell your first home, it is extremely valuable to consider your future buyer. One key factor to consider is the area’s school district. Would your home be attractive to a family? If the answer is yes, there is a good chance you’ll have a more successful selling experience when the time comes.
Pay Close Attention To The Home Inspection
Once you’ve chosen the home you want to make an offer on, and the seller has agreed to terms, you will need to hire a licensed home inspector (or sometimes multiple home inspectors) to evaluate the home's condition. Keep this in mind: no home, no matter the age, is in perfect condition.
A good inspector will point out all the issues about the four main inspection points: HVAC, electrical wiring/panels, plumbing, and roofing. These four areas of concern will directly affect your home insurance coverage and more costly short and long-term repairs. The status of the inspection report will also play a role in the negotiation process between the buyer and seller. An experienced realtor will know exactly how to advise your next steps.
While not every scenario is highlighted here we are happy to answer any questions you have during your home buying experience. We even have a well-rounded list of vendors if you are in need of a referral.
I'm happy to answer any questions you still have, or if you need my list of trusted vendors for a referral!
Find a home that checks (most) of your boxes.