23 Things To Do Before Buying a Home
Are you thinking about buying a home?
The thought can be overwhelming. This is why our Granada Hills mortgage loan company urges you to be informed on home buying before making a big financial decision. Take the time to educate yourself about the many things to do before buying a home with our buying a house checklist.
After reading and implementing strategies discussed, you will be in a position to find your dream home and have a pleasant first-time homeownership experience.
1. Know Your Credit Score
Do you know your credit score?
Knowing your credit score can really work in your favor before purchasing a home. You may need to increase your credit score to obtain favorable loan terms. A higher credit score will result in lower interest rates and save you lots of money in the long run. One way to increase your credit score can be to use your credit cards more often surprisingly. When using them, you want to prove that you are able to pay. You can start by using them regularly, pay them monthly, and manage them properly.
Check out the graphic below we previously featured on our Facebook for more details of how you can increase your credit score.
2. Understand Your Credit
Building off the previous tip, along with knowing your credit score, you want to understand what all the numbers mean.
In short, your credit score is a number that represents your ability to pay off debts you owe. A higher credit score is better to have and is an indicator you are more likely to be able to handle paying your loan.
Want more info on understanding your credit score?
Watch the video below to help you understand what your credit score means.
3. Hire a Home Inspector
One of the many things to do before buying a home is working with a home inspector.
First check-in with your local realtor, most likely they know someone really well who they have built trust with from past transactions. You want a home inspector that will be transparent, and not be motivated to make a sale. If you want to choose your own checkout American Society of Home Inspectors and see what home inspectors are in your area.
4. Shop Around
Want to save more money?
Another major part of the home buying process deals with shopping around or finding the best deals available. This is crucial because a mortgage payment will likely be made for a very long time. Being patient and shopping around may say you thousands in the long run.
A common thing to consider is the APR or annual percentage rate. APR is essentially what it costs to borrow money. This can vary so shop around for the best mortgage loan. Check out this link by Credit Karma if you want more information on what is APR and why it is important.
5. Visit The Home
Did you Find a home you like?
Seeing a home online and seeing it in person can be a different experience. Pictures are made to make the home seem as nice as possible. You may get a different feeling about the home in person or it may confirm that this is a home you are interested in. Furthermore, you can familiarize yourself with streets and traffic in the area.
All this information you gather can later be used for negotiating terms as well.
6. Make Sure Listing Information is Accurate
Have you ever looked at listing photos and prices and think wow this looks great?
Sometimes online listings do not get updated regularly. When you view a home listing online it is always best to call or email the source to ensure everything is accurate. Prices and information change for various reasons.
There is often confusion on what parts of the home will be part of the sale and what items will not. Some items may be personal property and not included in transactions.
7. Purchase What Your Are Comfortable With
Do you know how money will you will have after mortgage payments?
You want to ensure you are comfortable and can ultimately afford to own the home of your choice. Consider how much money you will have after mortgage payments are made. Will you have enough for other expenses? Will you have extra to manage your type of lifestyle? These are important questions to consider, so first speak to a loan officer and discover what you may be entitled to.
Are you a veteran?
Our Granada Hills mortgage loan company has seen many veterans save thousands with VA loan financing options. To see what benefits are offered to veterans be sure to check out our blog post: 9 benefits of using a VA loan. All the saving with VA financing can definitely help determine what you are comfortable with and can afford.
8. Find a Trusted Realtor
Every city is different and that is why it is important to find a local realtor to help you. Realtors are great because they stay updated on home prices and can assess how much a home is worth. If you happen to be in the San Fernando Valley, look no further than Frank Guard, a veteran and trusted realtor and owner of Globe and Anchor Mortgage, a Granada Hills mortgage loan company.
Try one of the following tips when searching for a realtor:
Ask friends and family for referrals
Attend Open Houses
Google search “realtor near me”
Another tip to consider is speaking with a lender first. There are many lenders who are realtors as well, similar to many staff from our loan company in Granda Hills. If you want to discover how much you can afford and homes available within your budget try finding an agent with loan experience.
9. Get Pre Approved with a Lender
Why should you get a pre-approval before buying a home?
Before you buy a home, consider getting pre-approved. First time home buyers often overlook the mortgage pre-approval process not knowing it is one of the most important things to do when you buy a house. The pre-approval process is essentially a time when a loan officer reviews your financial situation and confirms you would be able to pay off the loan with your current financial and credit standing. A pre-approval essentially separates you from the pack of buyers. You are taken more seriously and are seen more qualified to purchase a home when you find one you love.
That being said, people often confuse pre-approval and pre-qualified.
Pre-approval vs Pre-qualification
Getting pre-qualified means a lender will assess how qualified you are based on the information you provide. No credit scores are ran and numbers are not verified. It is an estimation and can be a great indicator of what you can afford. With a pre-approval, everything is verified and you result in a more accurate determination of your ability to pay off a potential loan.
10. Research Home Options
A common problem for first time home buyers is knowing what type of property to buy.
Do you want to buy a home? condo?
The costs vary significantly so be sure to do your research on costs involved and what option will be best for you. You want to ensure the type of home you purchase is the one you love and that suits your type of lifestyle. This includes schools, crime reports, neighborhood information, nightlife, resources, and attractions.
11. Know The Costs
Do you Know the Costs Involved?
One of the main things to do before buying a home is to know and understand the costs involved with buying a house. These costs can vary on the type of loan.
Common costs involved in buying a house include:
Repair Costs
Property taxes
Private Mortgage Insurance
Escrow Fees
Appraisal Fees
Credit Report Fees
Always check with loan officer to know what costs you shall take into consideration.
Take into account your current financial standing budget to ensure you will be able to cover all costs involved. If you want more information on costs involved it is always best to check an experienced local realtor.
12. Check for Leakage
Does the home have a leak problem?
When you find a home you like be sure to check to make sure that there are no leaks. Leakage damage can occur from when it rains so make sure you ask. You don’t want to overlook this because you may end up in a home that has a water problem. If this problem is not fixed right away it may be the source to new problems that arise.
13. Hire a Mold Inspection Expert
A common problem with homes is mold, asbestos, and radon. Most common of the three is mold. Mold is the source of developing health problems. If you have asthma or breathing-related conditions, the effect of mold can be far worse. If you find that a home has mold, don’t panic because homes with mold can be fixed.
Second of the three is asbestos. Not as common as mold but still the cause of a lot of headaches. Similar to mold it can be fixed, but only under the guidance of an expert to make sure the job is done correctly.
Lastly is radon, which gets quite expensive to fix. Radon is often found in water or air and expenses depend on where the radon is located. Typically more expensive to fix when found in water.
When searching for a mold inspector, check with your local trusted realtor who has experience working with different inspectors and knows the top inspectors in the area.
14. Check Electrical Is Working Properly
Electrical can get tricky so again look for an expert in an area to make sure all the wires are connected correctly. Miswired electrical can create hazards. Be especially careful with older homes because these are the homes that usually have more issues and may not be wired properly.
15. Ensure Renovations Have Permits
Were home repairs verified?
In many cases, home renovations are made without a permit. This means that the repairs were not verified with a home inspector. A clear red flag when searching for a new home. In many cases, sellers neglect permits because of the added costs involved. This becomes problematic in the future so it is always best to ask the seller of the home to take care of any permits needed.
16. Have a Future Plan
Things to consider before buying a home include:
What type of furniture do you want? (Will it fit?)
Will you want to remodel the kitchen?
Do you want more garage space?
Will you need backyard or pool equipment?
This often gets overlooked while trying to find a home and getting pre-approved. Furniture and other features are an expense so make sure you have enough after the home buying process.
17. Keep Your Finances Stable
If possible try to keep your financial situation stable. One of the many things to do before buying a house that is easier said than done is keeping your finances stable, but well worth it when trying to buy a home. Keep in mind that your pre-approval was based on your financial standing. Car loans, other loans, change of job, taking out a loan elsewhere, and other financial standing changes may negatively affect your home loan eligibility. You may be on track to getting approved, and sudden changes may cause you to be denied.
18. Pay Off Any Debts
Do you have any debts?
One of the most important considerations when buying a home is paying off any debts. When buying a home, you will likely be entering a mortgage agreement. With that being said, you want to do your best to manage your finances and pay off any outstanding debts. Managing mortgage payments with other debts such as student loans, car loans, or other unpaid bills makes staying consistent with mortgage payments difficult in the long run. If possible it would be great to pay off any existing debt in order to manage mortgage payments much easier.
2 common methods to pay off debt include:
Paying highest interest rate first
Pay the smallest debt first
Either way, you want to first create a budget and look at income to expenses ratio then determine the best way to pay off the debt in order to purchase a home and make mortgage payments more comfortably
19. Check for Sex Offender Nearby
Often overlooked is checking for sex offenders in the nearby area. Is this something you would be comfortable with? If not be sure to check on the Family Watch Dog website page. If you are in California wanting to check for sex offenders nearby check out California Megan’s Law website. You can also check with a local realtor who is familiar with an area and can give you some more information regarding sex offenders nearby
20. Consider Commute Time
Do you know what your commute time would be from the home?
Check your phones’ map app and enter the locations during the time you would leave to work or school. See the estimated time, check the traffic conditions, and routes you would be taking.
If you have more time, we suggest driving through your route at the time you would be commuting.
After doing so you should get a better estimation of commute time and determine if you are comfortable with it. Be sure you are comfortable with the conditions you discover because that is what you will have to be dealing with for a long time.
21. Check School Ranking Nearby
Do you have any children or plan on having some in the future?
Consider looking at school rating and rankings in the area you were considering a home purchase. A great place to check is www.greatschools.org. As a parent, you want to make sure your kids are receiving a great education and are ultimately safe.
Determining how to choose a school for your child can be difficult. Before buying a home, consider the indicators below when looking at schools in the area.
Indications of a Good School Include
Good Reviews
Graduation Rates
Class ratios
Teacher Satisfaction
22. Determine Potential Growth
Would you consider selling your home in the future?
Another things to think about when buying a house is to determine potential value increase for a home.
In many cases, home values increase over time and will be worth more. This is why it is important to view all homes, the nicest on the block and ones not too appealing. There may an investment opportunity. If this is something you would possibly be interested in, it is best to consult with a realtor.
23. Disregard Wall Color and Carpet
Of the several fixtures, wall color and flooring are easy fixes. We urge buyers to try and look beyond these attributes because they can be easily adjusted and less expensive compared to other more important fixes. It is always best practice to get a quote for carpet and wall painting changes to see if you still fall within your budget after your home purchase.
About Globe and Anchor Mortgage
Globe and Anchor Mortgage is a Granada Hills mortgage loan company led by veteran leadership. We are also a real estate company having experience in both loans and the home buying process. If you have any questions regarding things to do before buying a home or questions regarding loans, do not hesitate to contact us and be sure to follow us on Facebook for more.