Buying a home is a really exciting and fun process, but it is also a tremendously big financial decision and can be quite stressful. Here are some tips that will help you maximize your savings, while finding a great home.
- Get Pre-Approved
Getting pre-approved will save you a lot of time, stress, and hassle, because you will know exactly how much the bank is willing to lend you. Before you choose your bank, interview a few residential lenders and ask questions about junk fees, processing fees, and any other hidden charges that may cost you more money at closing. Once you’ve determined which bank is best for you, start the process. This will include the lender taking a look at all of your financial information, including debt, income, job stability, credit score, and more.
- Avoid Big Purchases and Hits on your Credit
When you are planning to buy a home, start to be cautious with your spending so you don’t effect your credit at all. Start up to 6 months prior to buying, and don’t make any big purchases until you sign on the dotted line, and have the keys in your hand. This includes purchasing a car, quitting/changing jobs, and taking out a credit card to purchase furniture or materials to improve your new home.
- Don’t Try to Time the Market
This is for buyers and sellers. Inventory and rates fluctuate regularly. If you see a house you like and can afford, then you should move on it. There are no guarantees with rates and there are also no guarantees a better option will come along at a price you can afford. Likewise for a buyer, don’t wait until Spring because you think more people are going to buy then. People buy year-round. Spring just gives more options for the buyer, so it may play to your benefit to list in the winter months.
- Don’t Fall in Love
Love is a beautiful thing… but it makes us emotional. Emotional decisions are oftentimes rushed and irrational. Falling in love with a house will inhibit your ability to make a smart financial decision that will impact your future. Find a good house, negotiate a good price, close the deal, then fall in love!
- Don’t Buy the Best House on the Block
Yes, the best is cool, but do you know what is cooler? Not being broke. Find a nice neighborhood, and look for a home that is nice, but could maybe use a little work. Use your mad negotiating skills to get the price you think it’s worth, then consider the added in contractor fee’s you’ll need to make the home what you want it to be. Many lenders will build home improvement fees right into your loan. Because you bought the house at the price you wanted to, the improvements you make will increase the value of the property right away. Not only will you have a great home without breaking the bank, but you should have lots of equity when you go to sell. Win/Win!!!