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This Old House - Do-it-Yourself

Buying a Home? 4 Crucial Steps to Take Before Signing the Dotted Line

Written by Posted On Tuesday, 09 January 2018 14:27

If you aspire to become financially stable and independent, owning a home is a critical step for you to take. Just because it’s important, though, you shouldn’t let yourself take the plunge into home ownership before you’re well and truly prepared. Prior to agreeing to a home purchase, there are several things you need to have in place to ensure that you won’t meet with disaster down the road. Here are the four most crucial things you need to do before formally agreeing to buy a house.

Have Savings Beyond Your Down Payment

Everyone knows that they need to save for a down payment before buying a home. The need for saving doesn’t end there, though. When you buy a home, you’re taking on a financial obligation to make your mortgage payment every month until it has been paid off. Since this is the case, you need to be absolutely sure that you can pay your mortgage even if you lose your job, get laid off or encounter other expenses. As a general rule, it’s a good idea to have enough money to make your mortgage payments for a year saved back exclusively for that purpose. If something should happen to your normal income, then that money can prevent you from losing your home and give you enough time to find a new job.

Get a Home Inspection

Though walking through a home will let you decide whether you personally like it or not, it usually won’t reveal any problems that may exist. For that, you need to have a home inspection done by a certified professional. Home inspections can catch problems that may cost you substantial amounts of money later on, such as a bad roof or plumbing that is long since past due for an update. Going into a home purchase without having had a comprehensive inspection done is one of the worst things you can do, as you can be left totally unprepared for expensive maintenance issues you never even knew existed.

Shop Around for Your Mortgage

Taking out a mortgage is just like any other loan in that you should always try to find the lender that will give you the best rate. With mortgages, though, this step is even more important, since even very small rate differences can amount to considerable sums of money thanks to the size of the average mortgage. Unfortunately, many first-time home buyers end up taking out the first mortgage they qualify for out of convenience. If you’re willing to do a little legwork, though, you can end up saving yourself hundreds or thousands of dollars over the lifetime of your mortgage.

Try to Get the Price Down

Before you commit to buying, it’s always worthwhile to see if you can get a lower price on the home. Don’t be too aggressive, as the seller will be unlikely to accept an offer that is far below his or her asking price. If you can save a few thousand dollars, though, it never hurts to put in an offer that is moderately lower than the asking price. This saves you not only the price difference, but also the interest you would have paid on that difference as you paid your mortgage down.

If you’re getting ready to buy a house, keep these four tips in mind. Properly used, they will help to keep you in good shape through the process of purchasing your home. As you go through that process, be sure to do everything you can to keep your expenses as low as they can be and to protect yourself from unexpected costs. By doing so, you’ll make it easy to buy your home and keep up the payments.

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