Grandma's Home-Buying Advice
Buying a home, especially your first home can be overwhelming. It is easy to catch the home-buying bug, but not nearly as easy to determine whether you should actually pursue your home ownership dreams. After you have decided to purchase, it’s a whole new mountain to climb in figuring out the process and trying to make good choices. Here are tips that I pass on to you from my parents, grandparents, and mentors.
1) START OFF WITH A STRONG MONEY FOUNDATION
Pay off as much debt as you can. Get the student, car, and credit card loans to a minimum. Home ownership has a way of bringing about more unexpected expenses and you don’t want those debts to be holding you back.
2) WORK OUT YOUR FUTURE BUDGET BEFORE BUYING
Go ahead a put together a monthly budget that includes your expected mortgage. Ask Davis for the budget template that he uses.
3) DON’T BUY IF YOU CAN’T STAY PUT
If you can’t commit to remaining in one place for at least a few years, then owning is probably not for you, at least not yet. With the transaction costs of buying and selling a home, you may end up losing money if you sell any sooner.
4) DON’T GET WIDE EYES AT THE BANK
Lenders want you to take as much money as they think you’re able to pay back. You don’t have to, nor should you probably get your maximum loan.
5) AIM FOR A HOUSE YOU CAN REALLY AFFORD
The rule of thumb is that you can buy housing that runs about two-and-one-half times your annual salary. But you’ll do better to use one of many calculators available online to get a better handle on how your income, debts, and expenses affect what you can afford. The last thing we want is for you to be house poor.
6) AVOID THE NICEST HOUSE IN THE NEIGHBORHOOD
Don’t buy it. It’s always better to be on the lower end of home values for the neighborhood. It gives your home value a higher ceiling and more room to grow.
7) LOOK BEYOND THE TACKINESS
This can be tough. You’re more than likely going to walk through some unappealing homes. Try to keep an open mind. Shabby light fixtures and shag carpet are easily replaceable. In fact, I personally like getting to make my own decisions on those things and always relish the opportunity to get a good deal on a house because the interior and exterior are a bit outdated.
8) BUY IN A NEIGHBORHOOD WITH DESIRABLE SCHOOLS
In most areas, this advice applies even if you don’t have school-age children. Reason: When it comes time to sell, you’ll learn that strong school districts are a top priority for many home buyers, thus helping to boost property values. An easy way to do this while shopping is by referencing Great Schools.
9) PROTECT YOUR EMOTIONS
House hunting can be hard. It’s easy to get your heart set on things but try not to count your eggs before they hatch…or before the dotted line is signed
10) HIRE A QUALITY HOME INSPECTOR
Sure, your lender will require a home appraisal anyway. But that’s just the bank’s way of determining whether the house is worth the price you’ve agreed to pay. Separately, you should hire your own home inspector, preferably an engineer with experience in doing home surveys in the area where you are buying. His or her job will be to point out potential problems that could require costly repairs down the road. We personally like our partners at Greenworks Home Inspections.
This is hardly an exhaustive list of all the things you need to think about and understand before buying a home. Get in touch with me to discuss your options and get help in the process.
If you have questions about whether or not you’re ready to purchase a home, contact us at 469-333-0975 or firstname.lastname@example.org. We would love to sit down and help you figure things out!