The home-buying process is an exciting and somewhat overwhelming process. There are many factors that contribute to finding your perfect home and money is one of the biggest barriers. It's important to be realistic as you begin the search process and the best way to stay optimistic is to stick to an established budget. If you create and communicate a budget, you won't run into issues with finding a home you love, but can't afford. Here are a few tips for prepping your home budget this buying season:
Factor Insurance
Insurance is an often overlooked expense when it comes to buying a home. All home owners are required to purchase insurance of some form. As you begin to work the numbers, it can really impact your budget so you'll want to be diligent about researching insurance rates. There are many places where you can also find free insurance quotes. It is recommended you get a few quotes and build the average of these items into your overall home budget.
Shop Interest Rates
Interest rates are another thing to consider when ironing out your home-buying budget. Rates vary by bank association so it would be beneficial to find a few lenders with the lowest rates. You can also research adequate lenders and select one that meets your needs. You'll want to take a look at the actual interest rate percentage as well as points and fees associated with the loan. Rates will also vary by type of loan(30 year, 15 year etc.) so make sure you consider the time period for paying off your loan.
Review Tax Implications
Property taxes are prevalent in almost any state. You'll be taxed on your home annually which can impact your overall budget and reduce the actual purchase prices of your home. Most taxes will be collected up front at the closing, so this is a cost you can't overlook. If you live in an area that borders two states, you might look at both tax rates and make your location decision based on these numbers. You can also research the property tax rates by state.
Survey and Inspection Costs
Even if your mortgage lender does not require it, it is recommended that you pay to have an inspection of the home. This is really important because inspections can uncover damage or structural issues that can require long-term care and expenses. If you don't complete the inspection, you may have major issues down the road. The survey of the land is also important. This process allows you to identify where your property begins and ends and will give you an idea of whether or not you can commit to expansion projects.
Consider Renovations
Some homes are completely move-in ready, but many homes will require some renovations. As you begin mapping out dollars and cents you'll want to have a padding for renovation projects. CashNet USA offers short-term loans, so its process is generally easier and faster than that of a regular loan. For example, if you love the layout of a house, but want different cabinetry or would like to update the bathrooms, you'll need to build these costs into the bottom line. Renovations will allow you to make your home cozy, comfortable, and in alignment with your individual tastes. If you think renovation is something you'll have to do regardless, there are some mortgage loansthat include renovation costs taking the guess work out of this process.
These are just a few of the many costs you'll want to consider in addition to the asking price of a home. Understanding these pieces of the puzzle will make sure you are prepared for the home-buying process. You'll enjoy the process much more knowing you've done your research and prepared a solid, foolproof budget.
