Tips and Tricks to Buying a Home
Thinking about buying a home? This is a very big life-decision but one that can be rewarding. Below are some tips of the trade to consider before you start the home buying process.
A home can be a great investment!
- Tax benefits: mortgage interest deduction, property tax deduction and tax advantages on appreciation (limitations apply, check with your accountant)
- Increase equity through appreciation and loan amortization
- Leverage: take advantage of buying a large investment with a relatively low down-payment.
- Lowest interest rate environment in history
It’s not all sunshine and flowers.
- Housing market fluctuations. A home is not easily disposed of during a down-market.
- Maintenance. Like a car, a home needs maintenance. There is always the chance for a large ticket repair.
Before you start the process.
Avoid making large purchases, changing jobs, taking out a new loan or an additional credit card and making large deposits outside of the norm.
Preparation will save you a lot of time and hassle throughout the home buying process. Save money for a down payment and clean up your credit history including paying off debt and making timely payments. Organize your last two years of tax returns, W-2 and recent paystub before meeting with a lender.
Get documents in order.
Your loan provider will need your last two years’ worth of tax returns, W-2, recent paystub and bank account balances.
Talk to a lender.
A qualified lender will help assess your credit history, credit score and income to determine the size and type of mortgage you may qualify for. A pre-approval letter from a lender demonstrates to a seller that you are a credible buyer and provides information on down payment required, interest rate and monthly payment.
Decide which type of loan is best for you.
There are two different loan products — conventional and government-insured.
- Conventional Loan: Low down payment options for buyers within low-moderate income.
- Government-Insured Loan: FHA and USDA
Pick the Right REALTOR®.
A good REALTOR® is a market expert who will explain the ins and outs of the process. Whether on the buying or selling side of the transaction, a REALTOR® is looking out for your best interest and wants you to be satisfied with your decision.
Real estate is about compromise. Prioritizing your wants and needs related to price, size, location and other features will help your REALTOR® find you the perfect home.